EP AUDITING+ASSURANCE...-MYACCT.LAB
16th Edition
ISBN: 9780134148656
Author: ARENS
Publisher: PEARSON CO
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Question
Chapter 24, Problem 18.4MCQ
To determine
Identify the option that is an example of an event occurring in the period between the end of the year being audited and the date of the auditor’s report that normally will not disclosure in the financial statements or auditor’s report.
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A company’s management has uncovered events that indicate that substantial doubt exists that the company can pay its debts as they come due over the following year. Management studies the plans created to address this risk. How can the company avoid disclosing that this substantial doubt exists?
a. The plans must be reviewed by the chief financial officer.
b. It must be probable that the plans will be implemented and it must be probable that the plans will mitigate the conditions that raised substantial doubt.
c. Disclosure of the substantial doubt is required regardless of the availability of the plans.
d. The plans must have been tested before the end of the financial year.
1.Which of the following reports are likely when management has not made available minutes to the board of directors meetings during the year?
a)Neither adverse nor disclaimer.
b)Adverse only.
c)Both adverse and disclaimer.
d)Disclaimer only.
2.Which of the following is least likely to be considered in determining whether a misstatement pervasively misstates the financial statement?
a)An immaterial misstatement is similar to one that occurred in the prior year.
b)A material misstatement represents a substantial proportion of the financial statements.
c)A disclosure is fundamental to users’ understanding of the financial statements.
d)A material misstatement is confined to specific elements, accounts, or items of the financial statements.
3.Due to complications related to a national health crisis, the auditors were unable to observe major portions of the client’s year-end inventory count. However, they believe that they have been able to perform adequate alternative procedures. If…
8. An auditor should be aware of subsequent event that provide evidence concerning conditions that did not exist at year end but arose after year end. These events may be important to the auditor because they may:
a. Have been recorded based on preliminary accounting estimates.
b. Require adjustments to the financial statements as of the year end.
c. Have been recorded based on year-end tests for asset obsolescence.
d. Require disclosure to keep the financial statement from being misleading.
9. Analytical procedures used in planning an audit should focus on:
a. Identifying material weaknesses in internal control.
b. Enhancing the auditor’s understanding of the client’s business.
c. Testing individual account balances that depend on accounting estimates.
d. Evaluating the adequacy of evidence gathered concerning unusual balances.
Chapter 24 Solutions
EP AUDITING+ASSURANCE...-MYACCT.LAB
Ch. 24 - Prob. 1RQCh. 24 - Explain why an auditor is interested in a clients...Ch. 24 - Prob. 3RQCh. 24 - Prob. 4RQCh. 24 - Prob. 5RQCh. 24 - Prob. 6RQCh. 24 - Prob. 7RQCh. 24 - Prob. 8RQCh. 24 - What major considerations should the auditor take...Ch. 24 - Identify five audit procedures normally done as a...
Ch. 24 - Prob. 11RQCh. 24 - Prob. 12RQCh. 24 - Prob. 13RQCh. 24 - Prob. 14RQCh. 24 - Prob. 15RQCh. 24 - Prob. 16RQCh. 24 - Prob. 17RQCh. 24 - Prob. 18.1MCQCh. 24 - Prob. 18.2MCQCh. 24 - Prob. 18.3MCQCh. 24 - Prob. 18.4MCQCh. 24 - Prob. 19.1MCQCh. 24 - Prob. 19.2MCQCh. 24 - Prob. 19.3MCQCh. 24 - Prob. 20.1MCQCh. 24 - Prob. 20.2MCQCh. 24 - Prob. 20.3MCQCh. 24 - Prob. 21.1MCQCh. 24 - Prob. 21.2MCQCh. 24 - Prob. 21.3MCQCh. 24 - Prob. 22DQPCh. 24 - In an audit of the Marco Corporation as of...Ch. 24 - Prob. 24DQPCh. 24 - The field work for the June 30, 2016, audit of...Ch. 24 - Prob. 26DQPCh. 24 - Prob. 27DQPCh. 24 - Prob. 28DQPCh. 24 - Prob. 29DQPCh. 24 - Prob. 30DQP
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