Outline Day 16 - Student - Outline Day 16 overview Notes...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Outline Day 16 Chapter 22 – 23 overview Notes payable? Confirm and through Board meeting minutes Role of board of directors. What do they actually do? Capital stock verification? Transfer agent, board meeting minutes Footnote disclosure for Dividends? Bank reconciliation – purpose? Independence and separation of duties. Key Do we test cash if it is immaterial? Bank confirmations – what do they tell us? Subsequent period testwork after year end – why? Purpose Theft of cash. How do we catch this? Analytical procedures Chapter 24 – Completing the audit Table 24-1 on page 752 and talk about presentation and disclosure audit objective Contingent liability? Why is it important 1. There is potential for future payment to an outside party or the impairment of an asset that resulted from an existing condition 2. There is uncertainty about the amount of the future payment or impairment 3. The outcome will be resolved by some future events or events Table 24-2 on page 754 and right below that and talk about the contingent liability How do we find contingent liability – unusual balances in outstanding letters, review of bank balances after year end, income tax disputes 1. The list on page 755 is a good example of how to find the amount of contingent liabilities 2. If found then they again have to determine the likelihood 3. Inquiry of client’s attorneys – go over items on page 756 and show an example of a letter on figure 24-2 on page 757 4. If the attorney refuses, then the auditor will have to make a judgment call as to how to proceed and if it really is an contingent liability 5. Sarbanes – Oxley Act might require the disclosure and the information might have to come to audit committee. There are always concerns with illegal acts Subsequent events Show the figure 24-3 on page 759 and talk about the dates Subsequent events that have a direct effect on the F/S – read the items on page 759 Subsequent events that don’t have a direct effect – read the list on page 760 Audit tests 1. Review records prepared subsequent to the balance sheet date 2. Review internal statements prepared subsequent to the B/S date 3. Examine minutes issues subsequent to the B/S Date 4. Correspond with attorneys 5. Inquiry of management? 6. Obtain a letter of representation – talk about the importance of this letter Dual dating – subsequent event that affects the current period F/S but occurred after field work was completed but before the audit report was issued – why would this be important? Final evidence accumulation 1. Analytical procedures – all the time
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
2. Going concern – must pay close attention to this for the potential for the company to go bankrupt shortly after the audit report. Auditor’s judgment?
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern