Completing the Audit

Question 1

For Litigations and Claims, what is the responsibility
- of management
- of auditor

Answer 1

Management
- list of litigation and claims (primary evidence)
- assessment of outcome

Auditor
- letter of inquiry (corroborating evidence)

Question 2

Since it is the responsibility of the auditor to request for letter of inquiry, he is the one who will prepare it. True or False?

Answer 2

NOTE: same as confirmation request
Management → prepare / sign letter of inquiry

Question 3

For Related Party Transactions, what is the responsibility
- of management
- of auditor

Answer 3

Management
- identify, record, disclose RPT

Auditor
- verify if properly disclosed

Question 4

For Subsequent Events, what is the responsibility
- of management
- of auditor

Answer 4

Management
- identify, record, disclose SE

Auditor
- verify if properly disclosed

Question 5

Date of FS → December 31
Date of Auditor’s Report → March 5
Date of Issuance → March 20

NOTE : Date of Auditor’s Report → should not be earlier than last day of fieldwork

Answer 5

Yes

Question 6

EVENT IS BETWEEN DECEMBER 31 & MARCH 5
- Type 1 → adjust (existing as of 12/31)
- Type 2 → disclose (existing after 12/31)

Answer 6

Yes

Question 7

EVENT IS AFTER MARCH 5
- Material → consider
- Immaterial → ignore

Answer 7

Regardless if Type 1 or Type 2

Question 8

For Going Concern, what is the responsibility
- of management
- of auditor

Answer 8

Management
- assessment of GC
- disclose assessment

Auditor
- evaluate assessment
- evaluate disclosure
- identify material uncertainties and plans

Question 9

What Opinion to Issue
- inappropriate use of GC

Answer 9

Adverse
- whether adequately disclosed or not

Question 10

What Opinion to Issue
- material uncertainty + adequately disclosed

Answer 10

Unqualified + EOM
- Not Adequately Disclosed → Material (Q or A)

Question 11

What Opinion to Issue
- multiple uncertainties

Answer 11

Disclaimer of Opinion

Question 12

What if there are omitted procedures, what is the question to ask yourself as an auditor?

Answer 12

Did it affect the opinion?
- Yes → is it compensated by other procedures?
- No → no action

Compensated by other procedures?
- Yes → no action
- No → do omitted procedure

Question 13

MANAGEMENT REPRESENTATION LETTER
- not a substitute (but complements) audit evidence
- signed by?
- addressed to?
- date?

Answer 13

signature → CEO & CFO
addressee → auditor
date → date of auditor’s report

NOTE : different to management letter (IC)