Post on 15-Nov-2015
description
Modern Auditing:Assurance Services and the Integrity of Financial Reporting, 8th EditionWilliam C. BoyntonCalifornia Polytechnic State University at San Luis ObispoRaymond N. JohnsonPortland State UniversityChapter 19 Completing the Audit and Postaudit Responsibilities
Chapter Overview
Completing the AuditDo not pertain to specific transaction cycles or accounts
Performed after the balance sheet date
Involve many subjective judgments
Usually performed by audit managers or other senior members of the audit team
Completing the FieldworkMaking Subsequent Events ReviewTypes of EventsType 1 subsequent events
Type 2 subsequent events
Auditing Procedures in the Subsequent Period
Effects on Auditors Report
Subsequent Events
Completing the FieldworkReading Minutes of Meetings
Obtaining Evidence Concerning Litigation, Claims, and AssessmentsAudit Considerations
Letter of Audit Inquiry
Effects of Responses on Auditors Report
Completing the FieldworkObtaining Client Representation LetterContent of Representation Letter
Effects on the Auditors Report
Performing Analytical ProceduresOverall Review
Evaluating the FindingsMaking Final Assessment of Materiality and Audit RiskKnown Misstatements
Projected Uncorrected Misstatements (Sampling Techniques)
Estimated Uncorrected Misstatements (Analytical Procedures)
Likely Misstatement
Aggregate Likely Misstatement
Evaluating the FindingsEvaluating Going ConcernSubstantial Doubt ExistsObtain information of managements plansAssess likelihood of effective implementation
Substantial Doubts PersistsConsider adequacy of disclosureInclude explanatory paragraph
Evaluating the FindingsMaking Technical Review of Financial StatementsFinancial Statement Checklist
Formulating Opinion and Drafting Audit Report on Financial Statements
Evaluating the FindingsFormulating Opinion and Drafting Audit Report on Internal Controls Over Financial ReportingOpinion about fairness of managements assertion on internal controlsOpinion about adequacy of internal controls
Making Final Reviews of Working PapersFirst-levelManagerPartnerCold Review
Study BreakThese types of events provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.Type 1 subsequent eventsType 2 subsequent eventsOverall reviewBalance sheet date
B. Type 2 subsequent events
Study BreakThis item is obtained to complement other audit procedures, including confirmation of oral representations given to the auditor by management.Client representation letterLetter of audit inquiryFinal reviewAuditors report
A. Client representation letter
Study BreakThe total of uncorrected misstatements, projected uncorrected misstatements, and estimated misstatements for an account is called ______.Known misstatementLikely misstatementAggregate likely misstatementTolerable misstatement
B. Likely misstatement
Communicating with the ClientCommunicating Internal Control MattersSignificant Deficiency
Material Weakness
Communicating with the ClientCommunicating Matters Pertaining to Conduct of AuditAuditors responsibility under GAAS
Significant accounting policies
Auditors judgment about the quality of the entitys accounting principles
Management judgments and accounting estimates
Communicating with the ClientCommunicating Matters Pertaining to Conduct of AuditSignificant audit adjustments
Disagreements with management
Consultation with other accountants
Major issues discusses with management prior to retention
Difficulties encountered in performing the audit
Communicating with the ClientPreparing Management LetterInternal Control Matters
Recommendations regarding the management of resources
Tax-related Matters
Summary of Completing the Audit
Postaudit ResponsibilitiesSubsequent Events Between Report Date and Issuance of Report
Discovery of Facts Existing at Report Date
Discovery of Omitted Procedures
Study BreakThis is an internal control deficiency that adversely affects the companys ability to initiate, record, process or report external financial data reliably in accordance with GAAP.Material weaknessCorroborationMisappropriation Significant deficiency
D. Significant deficiency
Study BreakThe management letter may include all of the following items, except:Internal control mattersManagement recommendationsTax-related mattersAll of the above
D. All of the above