Small and Tall CPAs completed the audit of Big Company on

Small and tall cpas completed the audit of big

This preview shows page 6 - 8 out of 26 pages.

56.Small and Tall, CPAs, completed the December 31, 2012 audit of Big Company on February 10, 2013. After the audit report release date, an outstanding lawsuit against Big Company was settled for materially more than recorded in the December 31, 2012 financial statements. The amount recorded in the financial statements represented the best estimate of management and the company's attorneys at the time the audit was completed. Based on this new information, Small and Tall, CPAs should A. Determine whether persons are currently relying on the auditors' reports.B. Advise the client to make appropriate changes in the financial statements and reissue them.C. Notify each member of the board of directors of Big Company.D. Take no action because the event took place after the audit report release date.
Background image
57.A partner of the accounting firm who has notbeen involved in the audit performs an engagement quality review of documentation. This review usually focuses on 58.An entity's income statements were misstated due to the recording of journal entries that involved debits and credits to an unusual combination of expense and revenue accounts. Auditors most likely could have detected this irregularity by 59.Following the audit report release date, auditors became aware of facts existing at the report date that would have affected the reports had auditors then been aware of such facts. What is the most appropriate initial course of action that auditors should take?
Background image
Image of page 8

You've reached the end of your free preview.

Want to read all 26 pages?

  • Spring '12
  • janigrt
  • attorney

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes