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Questions and Answers
What is the final step in 'wrapping up' an audit engagement?
What is the final step in 'wrapping up' an audit engagement?
How can material transactions with known related parties be identified?
How can material transactions with known related parties be identified?
What should be used to review the adequacy of disclosures in an audit?
What should be used to review the adequacy of disclosures in an audit?
What is a procedure to identify material transactions with known related parties?
What is a procedure to identify material transactions with known related parties?
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What is a step in 'wrapping up' an audit engagement related to unrecorded liabilities?
What is a step in 'wrapping up' an audit engagement related to unrecorded liabilities?
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Study Notes
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
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Description
This quiz "Completing the Audit CPAR Advance Financial Accounting and Reporting" covers the procedures and concepts related to completing an audit, including Audit Theory. It is part of the CPA Review School curriculum and is relevant for accounting students preparing for professional certification exams.
