Wrap-up

Auditing and Assurance Services

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Completing the Audit - Learning Objectives Identify the final steps in the completion of an audit Understand the issues related to contingent liabilities . Identify procedures performed by auditors to evaluate contingencies Know the types of subsequent events and the procedures auditors use to  identify them Understand the effect of subsequent events on the financial statements  and dating of the audit report Know approaches to evaluating adjusting entries Summarize communications between the auditor and the client
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What are the stages of an audit? Accept Engag. & Establish Terms Plan Audit Issue Audit Report Perform Tests of Substantive Testwork Audit Wrap-up Understand Internal Controls Test Internal Controls Tests of Transactions Analytical Procedures Tests of Details of Balances
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Wrapping up the audit Contingent Liabilities Subsequent Events Attorney Letters Final Analytical Procedures Adjusting Journal Entries  Management Rep Letter Evaluate Going-Concern Assumption Read Annual Report Review Audit Documentation
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What is a Contingent Liability? Has three key components 1.  Potential future payment to an outside party  or impairment of an asset from existing  conditions 2.  Uncertainty about the amount 3.  Will be resolved by future event(s)
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Contingent Liability - Reporting Reporting depends on the likelihood Remote  no disclosure necessary Reasonably Possible  footnote Probable  If reasonably estimated – book it If not – footnote
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Contingent Liability – Audit Steps 1. Evaluate treatment of known contingent liabilities 2. Identify contingencies not already identified by management, where  practical
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This document was uploaded on 03/04/2012.

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Wrap-up -

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