Completing the Audit CPAR Advance Financial Accounting and Reporting Quiz

Wrapping Up an Audit Engagement

• The final step involves evaluating the results of the audit procedures and determining if the audit objectives have been met.

Identifying Material Transactions with Known Related Parties

• Material transactions with known related parties can be identified by reviewing the entity's records and accounts, such as minutes of meetings, contracts, and agreements.
• Procedures to identify these transactions include:
  • Reviewing confirmations from related parties
  • Analyzing transactions for unusual or unexplained patterns
  • Reviewing accounting records for large or unusual transactions

Reviewing Disclosures in an Audit

• Professional skepticism and judgment should be used to review the adequacy of disclosures in an audit, considering factors such as:
  • Materiality
  • Relevance
  • Understandability
  • Consistency

Procedures for Identifying Material Transactions

• One procedure to identify material transactions with known related parties is to prepare and review a related-party transaction matrix, which summarizes and analyzes the transactions.

Unrecorded Liabilities in Wrapping Up an Audit

• A step in wrapping up an audit engagement related to unrecorded liabilities involves performing procedures to identify and evaluate unrecorded liabilities, such as:
  • Reviewing the entity's financial records and minutes of meetings
  • Performing analytical procedures to identify unusual or unexplained balances or transactions
  • Inquiring about potential unrecorded liabilities with management and others