CH 11.1
True or false: The auditor has no responsibilities related to the audit after the audit report release date.
False
Which of the following statements is correct?
Significant events occurring between the date of the audit report and the audit report release date may result in a dual dated report.
An overall review of the reasonableness of accounting estimates is similar in nature and purpose to the role of
analytical
Written representations ______.
are written on client letterhead and addressed to the auditor support other evidence obtained during the audit
Attorney letters should be ______.
requested by the client and mailed by the auditor with responses sent directly to the auditor
Written representations are ______.
required before the audit can be completed also known as client representations
Management's refusal to provide written representations ______.
should cause auditor skepticism constitutes a scope limitation
The attorney's response to an attorney letter ______.
should note any issues where the attorney's view is different from the client's view should be provided directly to the auditor
Auditors must rely on the attorney to inform ______ if an unasserted claim must be disclosed.
the client
Interim testing occurs between the beginning of the year and ______.
the date of the financial statements
A contingent liability that requires special consideration by auditors is ______.
the outcome of litigation
Attorney letters should be sent ______.
to all attorneys who worked for a client during the period under audit
Attorneys should encourage clients to disclose unasserted claims to auditors ______.
when the assertion of a claim is at least probable
Auditors should ensure that ______ have been properly disclosed.
both favorable and unfavorable contingencies
Auditors are responsible for ______ accounting estimates.
considering the reasonableness of
Potential warranty payments, tax disputes with the IRS and debt guarantees on behalf of another party are all examples of
contingent
Audit work performed between the beginning of the year and the date of the financial statements is referred to as
interim testing
Auditors should discuss pending litigation with the client's ______.
management and attorneys
When auditors assess the risk of material misstatement from pending litigation, they will request the client send a(n
Blank 1: attorney Blank 2: letter
The date of the auditor's report is also referred to as the audit
Blank 1: completion Blank 2: date
Significant events occurring between the date of the audit report and the audit report release date may result in a(n)
Blank 1: dual Blank 2: dated or date
Auditors must be alert for adjustments made to meet analysts' profit expectations which is known as
Blank 1: earnings Blank 2: management
Reclassifying items that should be deferred or contra-assets or liabilities to miscellaneous or other revenues and expenses, especially at the end of a quarter or year is referred to as
Blank 1: earnings Blank 2: management
Written representations are also known as or representations.
Blank 1: management Blank 2: client
Examining material account transactions that occur between the interim testing date and the date of the financial statements is a common - procedure.
Blank 1: roll Blank 2: forward
If relevant internal controls are effective, auditors may use - procedures to move interim conclusions to the year-end date.
Blank 1: roll Blank 2: forward
When no formal lawsuit or other action has been filed or threatened, but circumstances could result in an action in the future, a(n
Blank 1: unasserted Blank 2: claim
The auditor's report on the entity's financial statements covers all events that occur up to the ______.
date of the auditor's report
The auditors have gathered sufficient, appropriate evidence on which to base their report at the ______.
date of the auditor's report
After the audit report release date, the auditor ______.
may have to take steps to ensure the report is not relied on
A letter of inquiry to an attorney ______.
must be sent directly from the client
