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WorksheetsModule 14: Complete the Audit
Total questions: 25
Worksheet time: 8mins
What is the main objective of completing the audit fieldwork?
Issuing the audit report
Acquiring additional audit evidence
Preparing management letters
Reviewing internal controls only
The subsequent events period extends from:
The beginning of the fiscal year to the balance sheet date
The end of fieldwork to issuance of the audit report
The balance sheet date to the end of fieldwork
The audit planning phase to report issuance
According to GAAS, the auditor is required to discover subsequent events that:
Occur after issuance of the audit report
Have no impact on financial statements
Have a material effect on the financial statements
Occur only before the balance sheet date
What responsibility does the auditor have regarding subsequent events after the end of fieldwork?
Full responsibility until report issuance
Responsibility only for fraud-related events
No responsibility to discover such events
Responsibility if management informs the auditor
Reading minutes of meetings is important because they may reveal:
Daily operational issues
Matters with audit significance
Only financial performance results
Staff performance issues
Which meetings’ minutes should be reviewed by the auditor?
Departmental staff meetings
Customer meetings
Stockholders, board of directors, and subcommittees
Vendor meetings
Who is the primary source of information regarding litigation, claims, and assessments?
External auditors
Internal auditors
Management
Regulatory authorities
What is the auditor’s primary means of corroborating information about litigation and claims?
Board minutes
Management interviews
Letter of audit inquiry to external legal counsel
Financial statement notes
What is the purpose of a management representation letter?
Replace other audit procedures
Complement other audit procedures
Serve as legal evidence only
Eliminate auditor judgment
Refusal by management to provide a representation letter may result in:
An expanded audit scope
Immediate audit termination
A limitation on the audit scope
Automatic qualified opinion
Performing analytical procedures at the end of fieldwork is primarily for:
Detecting fraud
Overall review of audit conclusions
Testing internal controls
Planning the audit
End-of-fieldwork analytical procedures are based on:
Preliminary financial data
Unaudited trial balances
Financial statements after all adjustments
Budgeted financial data
Audit results are referred to as:
Audit opinions
Audit programs
Reported audit findings
Management assertions
What is the first step in evaluating audit findings?
Communicating with management
Assessing evidence against audit criteria
Issuing the audit report
Reviewing disclosures
Audit criteria represent:
Auditor judgments
Management policies
Requirements the organisation must meet
Audit sampling techniques
When forming an audit opinion, the auditor should consider audit evidence that:
Only supports management assertions
Only contradicts financial statements
Both corroborates and contradicts assertions
Relates only to material misstatements
Which of the following must be evaluated as part of audit results?
Employee performance
Market conditions
Uncorrected misstatements
Marketing effectiveness
The auditor should evaluate qualitative aspects of accounting practices to identify:
Cost-saving opportunities
Management bias
Tax planning strategies
Operational inefficiencies
If management bias combined with uncorrected misstatements results in material misstatement, the auditor must:
Ignore the bias
Expand sampling only
Determine the overall effect on financial statements
Issue a clean opinion
Communication of internal control structure matters refers to:
Minor administrative issues
Important flaws in control design or operation
Routine operational feedback
Employee training needs
When should internal control deficiencies be communicated?
Only at year-end
After issuing the audit report
As soon as possible, during or after the audit
Only upon request by management
Communication about the conduct of the audit is primarily directed to:
External regulators
Internal auditors
Audit committee or board of directors
All company employees
Communication with the audit committee may be:
Only written
Only oral
Either oral or written
Informal only
When audit communications are written, the report should clearly state it is intended for:
Shareholders only
Management only
Audit committee or board of directors
External auditors
The purpose of a management letter is to:
Replace the audit report
Communicate required audit opinions
Provide recommendations to improve operations
Report fraud findings only
