Subsequent event and materiality

The objectives of the ordinary audit of financial statements is the expression of an opinion on:

• The fairness of the financial statements in all material respects

• The accuracy of the financial statements

• The accuracy of the annual report

• The accuracy of the balance sheet and income statement

Which of the following procedures would an auditor most likely perform to obtain evidence about the occurrence of subsequent event?

• Inquiring as to whether any unusual adjustments were made after the date of the financial statements

• Confirming a sample of materials Accounts receivable established after the date of the financial statements

• Comparing the financial statements being reported on with those of the prior period

• Investigating personnel changes in the accounting department occuring after the date of the financial statements.

At the completion of the audit, which of the following would not a subsequent event procedure?

• Review available meeting minute

• Obtain a bank confirmation letter for year end balance

• Review management accounts

• Discuss any in conclusive items from the audit with the directors and obtain updated information

The auditors are concerned with what period after the balance sheet date?

• The date of the final review of the audit working papers

• The date of auditor’s report

• The issue of the financial statements

• Six months after the year end

Which of the following is normally included within the management representation letter?

• All books and documentation have been made available

• Details of the bank balance

• Confirmation of intended dividend

• Details of resignation of directors

Which of the following matter would require an adjustment to be made to the financial statements, if it was discovered before audit fieldwork was completed?

• A discussion with management where you find out they intend to change the main operation of the company

• A major law suit for damaged against the Company with proceedings beginning after the balance sheet date

• Liquidation of a major customer

• Application for grant funding

The reason an independent auditor gathers evidence is to:

• Form an opinion on the financial statements

• Detection fraud

• Evaluate management’s performance

• Evaluate the entity’s internal control

An appropriate time limit within which to complete the assembly of the final audit file is ordinarily

• More than 60 days after the auditor’s report

• Not more than 60 days after the financial year

• More than 60 days after issue of the financial statement

• Not more than 60 days after the date of the auditor’s report

Which of the following items are consists in the materiality?

• Overall materiality

• Clearly trivial threshold

• Specific materiality

• All the above

Materiality addresses the significant of financial statement information to economic decision made by users on the basis of the financial statements?

• True

• False