Subsequent events for reporting purposes are defined as events that occur subsequentto the(1) balance sheet date but before the date of the auditor’s report.(2) date of the auditor’s report.(3) balance sheet date.(4) date of the auditor’s report and concern contingencies that are not reflected inthe financial statements.

Subsequent events for reporting purposes are defined as events that occur subsequentto the(1) balance sheet date but before the date of the auditor’s report.(2) date of the auditor’s report.(3) balance sheet date.(4) date of the auditor’s report and concern contingencies that are not reflected inthe financial statements.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter15: Audit Reports For Financial Statement Audits

Section: Chapter Questions

Problem 12RQSC

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The accounting and auditing literature discusses several different types of accounting changes. For each of the changes listed below (a. through c.), indicate whether the auditor should add a paragraph to the audit report, assuming that the change had a material effect on the financial statements and was properly justified, accounted for, and disclosed. Assume that the organization is a U.S. non-public company. a. Change from one GAAP to another GAAP b. Change in accounting estimate not affected by a change in accounting principle c. Change in accounting estimate affected by a change in accounting principle d. Correction of an error c. Change from non-GAAP to GAAP (a special case of correction of an error)
Type I Subsequent Events in auditing are : A. Are those events that provide new information about conditions existing at balance sheet date requiring adjustments in the financial statements. B. Involve events occurring after balance sheet date but not requiring to be disclosed in financial statements C. Provide new information about conditions occuring after the balance sheet date and requiring adjustments in financial statements. D. Involve events occurring after balance sheet date and require to be disclosed in financial statements
If an event occurs ‘after the reporting period’, then from the perspective of accounting standards, it is considered that the event has occurred between the ‘end of the reporting period’ and the ‘date when the financial statements are authorised for issue’. What is the date when the financial statements are authorised for issue’?
Directions: Please select the appropriate answer on the statement below;B - If the statement is trueS - When the statement is false or part of the statement is false The objective of the first reporting standard is to ensure that comparisons of financial statements between periods do not have a material impact on changes in accounting standards or provide adequate disclosures if those changes have a material impact on the comparison of financial statements between periods.
The auditors’ responsibility for actively performing procedures to discover subsequent events usually ends: a. On the balance date b. On the audit report date. c. On the date the financial report is issued to shareholders. d. The responsibility does not end.
Statement 1: The date of the issuance of the financial statements shall be before the date of the auditors report. Statement 2: A subsequent event after the closing date, wherein it is related to a condition that existed before the closing date, is a subsequent event that would require an adjustment. Statement 3: If the management did not disclose a related party transaction in the notes to financial statements, it iS appropriate for the auditor to disclaim an opinion. A. Only one statement is correct B. Only two statements are correct C. All statements are correct D. All statements are incorrect
For a subsequent event condition existing on or before the balance sheet date, the auditor should Group of answer choices Consider a note disclosure Report to audit committee Alert shareholders directly Adjust financial statement amounts
The auditor's report is where the auditor certifies that the financial statements present fairly the financial position, results of operations, and cash flows of the company. O True O False ………..
If the statement of financial position error is discovered in a subsequent accounting period, what action is to be done by the entity? A. Reclassify the item to its proper real account but do not restate the statement of financial position of the prior year affected by the error. B. Reclassify the item to its proper real account. C. Restate the statement of financial position of the prior year affected by the error. D. Reclassify the item to its proper real account and restate the statement of financial position of the prior year affected by the error
Which type of audit report specifies that financial statements do not present fairly the financial position, results of operations, and cash flows in conformity with accounting standards? A. Qualified report B. Adverse report C. Unqualified report D. Disclaimer of opinion
If the auditor verifies a debtor’s account balance, which is comprised of a number of transactions, at the end of the financial period by sending a debtor’s confirmation request, this is an example of a Select one: A. substantive test of transactions B. test of controls C. substantive analytical procedure D. substantive test of balances
Which of the following is not a typical note included in the notes to financial statements? Group of answer choices A note describing the auditors’ opinion of management’s future financial plans A note describing the accounting rules applied in the financial statements A note describing possible financial obligations not included in the financial statements A note providing more detail about specific items shown in the financial statements