Audit Quiz - Chapter 24

Question 1

The auditor’s identification and analysis of a client’s contingent liabilities is a critical part of final audit process.

Answer 1

True

Question 2

Audit procedures for identifying contingent liabilities include management inquiry, review of corporate minutes, and inquiries of the client’s attorney.

Answer 2

True

Question 3

Material unasserted claims are not required to be reported in a client’s financial statements.

Answer 3

False

Question 4

Omitted material asserted or unasserted claims due to scope limitation require the auditor to render a Qualified, Adverse, or Disclaimer opinion.

Answer 4

False

Question 5

The Subsequent Review Period of an audit covers the end of the client’s reporting period to the issuance of the audit report.

Answer 5

False

Question 6

Additional audit procedures are required to address certain business matters beyond the client’s ending balance sheet date.

Answer 6

True

Question 7

Final reviews of the overall audit are typically done by an independent staff level auditor.

Answer 7

False

Question 8

Analytical procedures are essential in the final review of the audited financial statements.

Answer 8

True

Question 9

During final communications with the client at the end of the audit, only material fraud risks are required to be communicated to the client.

Answer 9

False

Question 10

A Management Letter and a Client Letter of Representation are essentially the same thing.

Answer 10

False

Question 11

Subsequent discovery of facts is a regular occurrence in audits.

Answer 11

False

Question 12

Management holds primary responsibility for disclosing subsequent discovery of facts impacting the reporting on financial statements.

Answer 12

False

Question 13

Subsequent discovery of facts are only applicable to events that occurred during the audit period (i.e. by the date of the audit report).

Answer 13

True