 Show Chapter 10 Multiple Choice Questions Subsequent Events 1.Which of the following is not among the characteristics of the procedures performed in completing the audit? a.They are optional since they have only an indirect impact on the opinion to be expressed. b.They involve many subjective judgments by the auditor. c.They are performed after the balance sheet date. d.They are usually performed by the audit managers or other senior members of the audit team who have extensive audit experience with the client. 2.An audit has the responsibility to actively search for subsequent events that occur subsequent to the: a.Balance sheet date. b.Date of the auditor’s report. c.Balance sheet date, but prior to the audit report. d.Date of the management representation letter. 3.“Subsequent events” for reporting purposes are events which occur subsequent to the a.Financial statement date. b.Date of the auditor’s report. c.Financial statement date but prior to the date of the auditor’s report. d.Date of the auditor’s report and concern contingencies which are not reflected in the financial statements. 4.When completing the audit, the auditor performs procedures designed to identify subsequent events that may require adjustment of, on disclosure in, the financial statements. Accordingly Those that provide evidence Those that are indicative of about conditions that conditions that aroseexisted at period endsubsequent to period end a.Will require adjustment.Will require adjustment. b.Will require adjustment.Will require disclosure. c.Will require disclosure.Will require disclosure. d.will require disclosureWill require adjustment. 5.The auditor has completed his assessment of subsequent events. The proper accounting for subsequent events that have a direct effect on the financial statement is to: a.Adjust the financial statements for the year under audit. b.Disclose in the notes to financial statement the amount of the adjustment. c.Duly note in the audit work papers that next year’s financial statement need to be adjusted. d.Make no adjustment of the financial statement for the year under audit. 6.Which of the following procedures should an auditor generally perform regarding subsequent events? a. Compare the latest available interim financial statement with the financial statement being audited. What are the auditor's responsibilities regarding subsequent events?The auditor should perform procedures designed to obtain sufficient appropriate audit evidence that all events up to the date of the auditor's report that may require adjustment of, or disclosure in, the financial statements have been identified.
Which of the following procedures would an auditor most likely perform in obtaining evidence about subsequent?Choice “B” is correct. In obtaining evidence about subsequent events, the auditor would most likely inquire of management whether there have been significant changes in working capital since year-end. Such changes could be indicative of a going concern problem, which would require financial statement disclosure.
What is a subsequent event in audit process?A subsequent event is an event that occurs after a reporting period, but before the financial statements for that period have been issued or are available to be issued. Depending on the situation, such events may or may not require disclosure in an organization's financial statements.
Which of the following procedures would an auditor most likely perform?Which of the following procedures would an auditor most likely perform in planning a financial statement audit? Comparing the financial statements with anticipated results.
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Which of the following procedures would an auditor generally perform regarding subsequent events?
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