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At the closing meeting, a representative of the top management of the auditee
organisation informs the auditor that they have now implemented a process
to correct a serious nonconformity that the auditor found on the first day of a
two-day Stage 2 audit. The representative of top management proposes that
the auditor examine the process during the meeting and then withdraw the
nonconformity report. How should the auditor respond?
Step by step
Solved in 2 steps
- When should the final report from an external auditor be issued? After interim reports During the exit conference At the beginning of the auditing process After the auditor leaves the premise for the last timeWhat are key audit matters? How do these affect the format of the audit report? b) Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart iswriting a report for his audit partner based on these results and will be attending a meetingtomorrow with the partner and representatives of the company to discuss them. The issue will bewhether the financial report should be amended, or additional notes included for thesesubsequent events.Many of the items are not material and Stewart will recommend that no action be taken withrespect to these. However, there are several items that Stewart believes are material and shouldbe discussed at the meeting. These are as follows.(a) The board is planning to issue shares in a private placement on 15 August. (b) The share issue is to fund the purchase of a 60 per cent stake in another company. Thenegotiations are in the final stages and although the contract is not yet signed it will be signedby 15 August. (c) A writ was…At the closing meeting, a representative of the top management of the auditee organisation informs the auditor that they have now implemented a process to correct a serious nonconformity that the auditor found on the first day of a two-day Stage 2 audit. The representative of top management proposes that the auditor examine the process during the meeting and then withdraw the nonconformity report. How should the auditor respond?
- As the audit associate, you were asked by the senior associate to check the completeness of confirmation letters. Upon your review, there is a supplier that has not yet given their reply. What alternative audit procedure would most likely be performed by the audit associate, assuming the audit is at its wrap-up stage? Group of answer choices A. Vouch subsequent payments B. Review the invoice register until audit report date C. Send another confirmation letter D. Perform analytical proceduresAt the completion of the audit, management is asked to make a written statement that it is not aware of any undisclosed contingent liabilities. This statement would appear in the: a. Engagement letter. b. Management letter. c. Management representation letter. d. Legal representation letter.Supervision and review are essential parts of managing an engagement. When the auditor obtains audit evidence about the operating effectiveness of controls during an interim period, that is enough to support reliance to reduce substantive procedures to be performed at year-end. Group of answer choices True, False True, True False, True False, False
- a) What are key audit matters? How do these affect the format of the audit report? b) Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is writing a report for his audit partner based on these results and will be attending a meeting tomorrow with the partner and representatives of the company to discuss them. The issue will be whether the financial report should be amended, or additional notes included for these subsequent events.Many of the items are not material and Stewart will recommend that no action be taken with respect to these. However, there are several items that Stewart believes are material and should be discussed at the meeting. These are as follows.(i) The board is planning to issue shares in a private placement on 15 August. (ii) The share issue is to fund the purchase of a 60 per cent stake in another company. The negotiations are in the final stages and although the contract is not yet signed it will be signedby 15 August.(iii)…21)An audit engagement letter A.May not be prepared each period for a recurring audit engagement B.Is prepared for the benefit of the audit, audit client and general public C.Shall include specific audit procedures to be performed by the auditor D.Is usually sent by auditor to the client upon the commencement of the audit 22)The engagement letter A.Can affect legal responsibility to the client B.Can be used to alter the auditor’s responsibilities under the standards on auditing C.Is used only if it is an engagement, but has no effect for review or compilation services D.Affects the CPA firm’s responsibility to external users of audited financial statements 23)Which of the following is notinvolved during pre-planning phase? A.Obtaining information about client’s legal obligation B.Obtaining an engagement letter C.Selecting staff for engagement D.Deciding whether to accept or continue an audit engagement 24)Which of the following matters is least likely to be discussed in an…Corrective action has been taken by an auditee immediately after the identification of a reportable finding. The IS auditor should: () include the finding in the final report. because the IS auditor is responsible for an accurate report of all findings () include the finding in the closing meeting for discussion purposes only () not include the finding in the final report. because corrective action can be verified by the IS auditor during the audit () not include the finding in the final report. because the audit report should include only unresolved findings
- Which of the following is NOT a reason the auditor performs some substantive procedures at an interim audit date? O increase the effectiveness of the overall audit O client may require it for reporting purposes O allow the audit firm to decrease the amount of work during their 'busy season' O increases the efficiency of the year-end audit(a) What are the key audit matters? How do these affect the format of the audit report? b) Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart iswriting a report for his audit partner based on these results and will be attending a meetingtomorrow with the partner and representatives of the company to discuss them. The issue will bewhether the financial report should be amended, or additional notes included for thesesubsequent events.Many of the items are not material and Stewart will recommend that no action be taken withrespect to these. However, there are several items that Stewart believes are material and shouldbe discussed at the meeting. These are as follows.(a) The board is planning to issue shares in a private placement on 15 August. (b) The share issue is to fund the purchase of a 60 percent stake in another company. Thenegotiations are in the final stages and although the contract is not yet signed it will be signedby 15 August. (c) A…You are the training manager at Guava & Co., Chartered Accountants. Some trainees in the firm have requested you to clarify the following issues: a) Can the auditor discard any audit document, forming part of his opinion, after the issuance of the auditor’s report? b) The changes that can be incorporated during the final the assembly process citing three such examples. c) The circumstances under which it becomes necessary to modify the existing audit documents or add new audit documents after the issuance of the auditor’s report and the matters that should be documented in such a situation. Required: Offer appropriate explanations for each of the above issues.
