A) True B) False Answer: A Terms: Auditors communicate internal control weaknesses Diff: Moderate Objective: LO 24 - 7 AACSB: Reflective thinking skills 8) Client representation letters are required by professional auditing standards, whereas management letters are optional. A) True B) False Answer: A Terms: Client representation letters; Management letters; Auditing standards Diff: Moderate Objective: LO 24 - 5 and LO 24 - 7 AACSB: Reflective thinking skills Learning Objective 24 - 8 1) The audit firm issues an audit report for its client. The auditor's have NO obligation to make further inquiries with respect to the client's audited financial statements unless: A) a development occurs that may affect the company's long term viability as a company. B) final resolution was made on disclosed contingency for which no liability needed to be accrued. C) new information comes to the auditor's attention concerning an event that occurred prior to the date of the audit report that, if known, would have impacted the audit opinion. D) a lawsuit, in which the risk of loss was considered remote, was resolved in the company's favor. Answer: C Terms: Audit report; Further inquiries Diff: Moderate Objective: LO 24 - 8 AACSB: Analytic skills 2) If an auditor discovers that previously issued financial statements are misleading, the most desirable approach to follow is to request that the client issue an immediate revision of the financial statements containing an explanation of the reasons for the revision. A) True B) False Answer: A Terms: Auditor discovers that previously issued financial statements are misleading Diff: Easy Objective: LO 24 - 8 AACSB: Reflective thinking skills
3) Subsequent discoveries of facts requiring the reissuance of financial statements arise from events occurring after the date of the auditor's report. A) True B) False Answer: B Terms: Events that occur after the date of the auditor's report Diff: Moderate Objective: LO 24 - 8 AACSB: Reflective thinking skills
1 Auditing and Assurance Services, 14e (Arens) Chapter 25 Other Assurance Services Learning Objective 25 - 1 1) The standards which govern the CPA's association with unaudited financial statements of private companies are the: A) AICPA's Code of Professional Conduct. B) Statements on Auditing Standards (SASs). C) Statements of Standards on Attestation Engagements (SSAEs). D) Statements on Standards for Accounting and Review Services (SSARS). Answer: D Terms: Standards; Unaudited financial statements; Private companies Diff: Easy Objective: LO 25 - 1 AACSB: Reflective thinking skills 2) The two types of services provided in connection with the Statements on Standards for Accounting and Review Services are: A) audit and examination services. B) compilation and review services. C) examination and review services.
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- Summer '19
- Cost Accounting, Financial audit, AACSB, Lo