Incorrect This event occurred after the balance sheet date and does not reflect

Incorrect this event occurred after the balance sheet

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b. Incorrect. This event occurred after the balance sheet date and does not reflect a situationexisting as at December 31, 20X0. Only the event giving rise to the lawsuit in option (c) hadoccurred as of December 31, 20X0 and the settlement introduced new information about theactual amount of the liability.c. Correct. Since an estimate had been made as of December 31, 20X0, the event giving rise tothe lawsuit had occurred, and the settlement introduced new information about the actualamount of the liability at December 31, 20X0. The other events occurred after the balance sheetdate and do not reflect a situation existing as at December 31, 20X0.d. Incorrect. This event occurred after the balance sheet date and does not reflect a situationexisting as at December 31, 20X0. Only the event giving rise to the lawsuit in option (c) hadoccurred as of December 31, 20X0 and the settlement introduced new information about theactual amount of the liability. Course Schedule Course Modules Review and Practice Exam Preparation
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Module 8: Test your knowledge Solution 3 a. Incorrect. CAS 710.17 requires disclosure in all cases where the comparative figures were auditedby another auditor.b. Incorrect. CAS 710.17 requires disclosure in all cases where the comparative figures were auditedby another auditor.c. Incorrect. CAS 710.17 requires disclosure in an other matter paragraph.d. Correct.CAS 710.17 requires that the auditor state, in an other matter paragraph, that apredecessor auditor audited the prior period financial statements. In addition, the other matterparagraph must include the type of opinion expressed by the predecessor auditor, the date ofthat report, and if the opinion was qualified, the reasons for the qualification. Course Schedule Course Modules Review and Practice Exam Preparation
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Module 8: Test your knowledge Solution 4 a. Incorrect. CAS 260 does not give specific guidance on the form of communication. b. Correct . CAS 265.09 requires communication in writing. This normally is in the form of a management letter. c. Incorrect. While CAS 260 does not require communication in writing, as a matter of good practice, all matters should be in writing. d. Incorrect. CAS 265 is explicit about the need for internal control weaknesses to be communicated in writing. Course Schedule Course Modules Review and Practice Exam Preparation
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Module 8: Test your knowledge Solution 5 a. Correct.Professional standards require the incoming auditor to enquire of the predecessorauditor if there is any professional reason why the appointment should not be accepted.b. Incorrect. Professional evaluations may differ based on the judgment and experience of thepractitioner.c. Incorrect. The predecessor’s opinion is not relevant to the current auditor, who has to form his orher own professional opinion of the audit.d. Incorrect. The present auditor is responsible for staying informed of changes in GAAP and howthey affect the audit. Course Schedule Course Modules Review and Practice Exam Preparation
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Module 8: Test your knowledge Solution 6 a. Incorrect. The simplicity of small-business operations leads to control weaknesses and does not
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