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The auditing standards regarding subsequently discovered facts refers to knowledge obtained after

The date interim audit work was complete.


The date of the auditors report.
The date the fieldwork began.
The date of the financial statements.
The primary reason auditors request responses to attorney letters is to provide auditors

The attorneys opinions of the clients historical experiences in recent similar litigation.
The probable outcome of asserted claims and pending or threatened litigation.
Corroboration of the information furnished by management about litigation, claims, and
assessments.
A description and evaluation of litigation, claims, and assessments that existed at the date of the
financial statements.
A. Griffin audited the financial statements of Dodger Magnificat Corporation for the year ended December
31, 2014. She completed gathering sufficient appropriate evidence on January 30 and later learned of a
stock split voted by the board of directors on February 5. The financial statements were changed to
reflect the split, and she now needs to dual date the report on the entitys financial statements. Which of
the following is the proper form?

December 31, 2014, except as to Note X, which is dated January 30, 2015.
February 5, 2015, except for the date of the auditors report, for which the date is January 30, 2015.
December 31, 2014, except as to Note X, which is dated February 5, 2015.
January 30, 2015, except as to Note X, which is dated February 5, 2015.
Ambrose is auditing the financial statements of Mays (dated December 31, 2014). The date of the
auditors report is February 17, 2015, and the audit report release date is February 20, 2015. For which
of the following matters would Ambrose have the least responsibility?

A customers deteriorating financial condition that was identified on February 19, 2015.
A merger that was announced by Mays and known by Ambrose on February 12, 2015.
A major loss due to a catastrophe that occurred and was known by Ambrose on March 1,
2015.
The obsolescence of inventory held on December 31, 2014, that was identified on January 20, 2015.
A major objective of written representations is to

Impress on management its ultimate responsibility for the financial statements and
disclosures.
Provide management an opportunity to make assertions about the quantity and valuation of the
physical inventory.
Shift responsibility for financial statements from the management to auditors.
Provide a substitute source of audit evidence for substantive procedures that auditors would
otherwise perform.
Which of the following normally occurs earliest in the audit examination?

Dual dating the auditors report on the entitys financial statements for subsequent events that exist
at the date of the financial
statements.
Preparation of the management letter.
Review of audit documentation.
Discovery of an omitted audit procedure.
Which of the following substantive procedures should auditors ordinarily perform regarding subsequent

events?

Send second requests to the clients customers who failed to respond to initial accounts receivable
confirmation requests.
Compare the latest available interim financial statements with the financial statements being
audited.
Communicate material weaknesses in internal control to the clients audit committee.
Review the cutoff bank statements for several months after the date of the financial statements.
Which of these persons generally does not participate in writing the management letter?

Public accounting firms audit team on the engagement.


Clients accounting and production managers.
Public accounting firms consulting and tax experts.
Clients outside attorneys.
What is an auditors primary method to corroborate information on litigation, claims, and assessments?

Reviewing the written representation letter obtained from management.


Verifying attorney-client privilege through interviews.
Reviewing the response from the clients lawyer to a letter of audit inquiry.
Examining legal invoices sent by the clients attorney.
Which of the following substantive procedures would auditors most likely perform to obtain evidence
about the occurrence of subsequent events?

Investigate changes in shareholders equity occurring after the date of the financial
statements.
Send confirmations to vendors with whom the client normally does business but for which no
balance in accounts payable is noted.
Confirm bank accounts established after the date of the financial statements.
Recompute a sample of large-dollar transactions occurring after the date of the financial statements
for arithmetic accuracy.
Subsequent knowledge of which of the following would cause the entity to adjust its December 31
financial statements?

Settlement of litigation in February for $100,000 that had been estimated at $12,000 in the
December 31 financial statements.
Settlement of a damage lawsuit for a customers injury sustained February 15 for $10,000.
Sale of an issue of new stock for $500,000 on January 30.
Storm damage of $1 million to the entitys buildings on March 1.
After the audit report release date, auditors determine that an important auditing procedure was omitted.
Which of the following initial courses of action is most appropriate?

Engage another public accounting firm to conduct a quality assurance review.


Determine whether the omitted procedure is important in supporting the auditors opinion on
the entitys financial statements.
Notify the board of directors and regulatory agencies that are currently relying on auditors reports.
Perform the omitted procedure or an alternative procedure.
Which of the following is ordinarily performed last in the audit examination?

Performing tests of controls.


Securing a signed engagement letter from the client.

Obtaining signed written representations.


Performing a review for subsequent events.
Which of the following is not required by generally accepted auditing standards?

Attorney letter.
Engagement letter.
Management letter.
Written representations.
The scope of an audit is not restricted when an attorney letter limits the response to

The attorneys opinion of the entitys historical experience in recent similar litigation.
The probable outcome of asserted claims and pending or threatened litigation.
Matters to which the attorney has given substantive attention in the form of legal
representation.
An evaluation of the likelihood of an unfavorable outcome of the matters disclosed by the entity.
Which of the following best describes the role of analytical procedures near the end of the audit
engagement?

To identify accounts that appear to be misstated with the intention of planning the nature, timing, and
extent of other substantive procedures.
To gather evidence to support one or more assertion(s) related to the account balance or class of
transactions.
To provide an overall review of the financial information and assessment of the adequacy of
evidence gathered during the audit engagement.
To identify possible deficiencies in the clients internal control over financial reporting.
Which of the following statements is not true with respect to written representations?

The failure of management to furnish them is a significant scope limitation, resulting in either
an adverse opinion or a disclaimer of opinion.
They are dated the same date as the auditors reports.
Auditors use them to corroborate information received during the audit from the client and its
employees.
They should address managements responsibility for designing internal control to prevent and
detect fraud.
Which of the following statements is most likely to be included in an attorney letter?

Please furnish to our auditors such explanation, if any, that you consider necessary to
supplement the foregoing information.
Our work enabled us to notice some actions that could enhance the profitability of the Company.
If any unasserted claims or assessments are omitted from this disclosure, please provide this
information directly to our auditors.
Certain representations in this letter are described as being limited to matters that are material.
Auditors have a responsibility related to managements disclosure of new information related to
subsequent events until

The following years date of the financial statements.


The audit report release date.
The date of the financial statements.
The date of the auditors report.

Which of these substantive procedures is not used to obtain evidence about contingencies?

Reading the minutes of the board of directors meetings.


Examining terms of sale in sales contracts.
Scanning expense accounts for credit entries.
Obtaining a letter from the clients attorney.
Hall accepted an engagement to audit the year 1 financial statements of XYZ Company. XYZ completed
the preparation of the year 1 financial statements on February 13, year 2, and its auditors began the
fieldwork on February 17, year 2. Hall completed gathering sufficient appropriate evidence on March 24,
year 2; Halls report and XYZs financial statements were released on March 28, year 2. The written
representations normally would be dated

February 13, year 2.


February 17, year 2.
March 24, year 2.
March 28, year 2.