AUD

AUD practice questions, page 19 of 41, with answer review and explanations.

Question 91

Which of the following events occurring after the issuance of an auditor's report most likely would cause the auditor to make further inquiries about the previously issued financial statements?

  1. A technological development that could affect the entity's future ability to continue as a going concern.
  2. The discovery of information regarding a contingency that existed before the financial statements were issued.
  3. The entity's sale of a subsidiary that accounts for 30% of the entity's consolidated sales.
  4. The final resolution of a lawsuit explained in a separate paragraph of the auditor's report.

Question 92

Wilson, CPA, obtained sufficient appropriate audit evidence to render an opinion on Abco's December 31, X1, financial statements on March 6, X2. A subsequent event requiring adjustment to the X1 financial statements occurred on April 10, X2, and came to Wilson's attention on April 24, X2. If the adjustment is made without disclosure of the event, Wilson's report ordinarily should be dated:

  1. March 6, X2.
  2. April 10, X2.
  3. April 24, X2.
  4. Using dual dating.

Question 93

An auditor concludes that a substantive auditing procedure considered necessary during the prior period's audit was omitted. Which of the following factors would most likely cause the auditor promptly to apply the omitted procedure?

  1. There are no alternative procedures available to provide the same evidence as the omitted procedure.
  2. The omission of the procedure impairs the auditor's present ability to support the previously expressed opinion.
  3. The source documents needed to perform the omitted procedure are still available.
  4. The auditor's opinion on the prior period's financial statements was unqualified.

Question 94

After issuing a report, an auditor has no obligation to make continuing inquiries or perform other procedures concerning the audited financial statements, unless:

  1. Information, which existed at the report date and may affect the report, comes to the auditor's attention.
  2. Management of the entity requests the auditor to reissue the auditor's report.
  3. Information about an event that occurred after the date of the auditor's report comes to the auditor's attention.
  4. Final determinations or resolutions are made of contingencies that had been disclosed in the financial statements.

Question 95

Which of the following procedures would an auditor most likely perform in obtaining evidence about subsequent events?

  1. Examine a sample of transactions that occurred since the year-end to verify the effectiveness of computer controls.
  2. Inquire of management whether there have been significant changes in working capital since the year-end.
  3. Recompute depreciation charges for plant assets sold for substantial gains since the year-end.
  4. Reperform the tests of controls that indicated significant deficiencies in the operation of internal control.