Question 1

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

Accepted Answer

Significant findings that require documentation include those that could result in modifications to the auditor's report (D) and circumstances that made it difficult to apply audit procedures (C). These findings may also lead to a revision of the risk assessment of misstatement (B) and may require the auditor to make adjustments to the financial statements (E). Additionally, findings related to complex or unusual accounting assertions or predictions (A) may be significant and should be documented. Therefore, both C and D are relevant for documenting significant findings.

Question 2

Audit documentation

Accepted Answer

Audit documentation, often referred to as working papers or workpapers, may indeed be recorded on paper or in electronic form. These documents serve as a record of the planning, nature, timing, and extent of the audit procedures performed, as well as the conclusions drawn from the evidence obtained during the audit.

Question 3

The auditor should complete the assembly of the final audit file within 45 days of the report release date (60 days for private companies).After the 45/60 day time period

Accepted Answer

The auditor should not delete or discard any information from the file after the 45/60 day time period. New information can be added if necessary if accompanied by an explanation for the addition. Therefore, both option A and B are correct.

Question 4

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

Accepted Answer

Significant findings that should be documented by the auditor include both accounting for complex or unusual transactions or accounting estimates or uncertainties and results of audit procedures indicating that the financial statements or disclosure could be materially misstated or the need for an auditor to revise his previous assessment of the risk of material misstatement. Adjustments that the auditor has made to the financial statements are also significant findings that need to be documented. However, circumstances that made it relatively easy for the auditor to apply auditing procedures or findings that could result in modifications to management's report may not necessarily be considered significant findings.

Question 5

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

Accepted Answer

Significant findings that should be documented include accounting for complex or unusual transactions or accounting estimates or uncertainties (choice A), as well as adjustments that the auditor has proposed to the financial statements (choice E). Therefore, choice F is the best answer which includes both options. The other choices (B, C, D, G, and H) do not cover all the necessary elements of significant findings that need to be documented.

Question 6

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

Accepted Answer

The nature, timing, and extent of audit procedures documentation should indicate the date the work was completed (B) and who reviewed the work (C) to ensure accountability and traceability in the audit process.

Question 7

The auditor should complete the assembly of the final audit file within 45 days of the report release date (60 days for private companies).After the 45/60 day time period

Accepted Answer

After the specified period for assembling the final audit file, the auditor should not delete or discard any information from the file. However, new information can be added if necessary, provided it is accompanied by an explanation of the effect of the new information on the auditor's conclusions. This ensures the integrity and completeness of the audit documentation.

Question 8

Audit documentation

Accepted Answer

Audit documentation, also known as working papers or workpapers, includes a record of the audit evidence obtained. It serves as a means of documenting the auditor's planning, execution, and reporting of the audit. Therefore, options A and C are correct. Options B and D are partially correct as they are also part of audit documentation. However, they do not fully represent audit documentation as they do not cover all the details of the audit. Option E is incorrect as audit documentation is always recorded on paper or electronically.

Question 9

Audit documentation

Accepted Answer

Audit documentation includes a record of the audit procedures performed as well as a record of the conclusions reached by the auditor from a review of the evidence. It may be recorded electronically or on paper, so options A, C, and E are incorrect. Option F is partially correct, but it only covers electronic files and audit procedures, omitting the record of conclusions. Therefore, the best choice is G.

Question 10

The auditor should complete the assembly of the final audit file within 45 days of the report release date (60 days for private companies).After the 45/60 day time period

Accepted Answer

The auditor should not delete or discard any information from the file after the 45/60 day time period, and new information can be added if necessary if accompanied by the name of the person adding the information. Therefore, the best choice is F.

Question 11

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

Accepted Answer

In documenting the nature, timing, and extent of audit procedures, the auditor should indicate who performed the work (choice A) and who reviewed the work (choice C). This helps to establish accountability and ensure that the work was properly supervised and checked for accuracy. The date the work was started (choice B) and the results of the review (choice D) may also be included, but are not as essential to document as the performers and reviewers of the work. The results of the risk assessment (choice E) are also important, but would be documented separately in the audit file.

Question 12

Audit documentation

Accepted Answer

Audit documentation includes a record of the audit procedures performed and may be recorded on paper or in electronic form. It does not include a record of the assumptions reached by the auditor from a review of the evidence. While audit documentation may be recorded electronically, it is not exclusively referred to as an electronic file. Additionally, while audit files obtained may be included in the documentation, this is not the only component. Therefore, the best choice is G, as it accurately identifies the two components of audit documentation.

Question 13

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

Accepted Answer

Significant findings typically include complex accounting issues (A), adjustments proposed by the auditor (E), and findings that could lead to modifications in the auditor's report (D). Choices B and C are incorrect because results indicating no misstatement or circumstances making it easy to apply procedures are not typically considered significant findings.

Question 14

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

Accepted Answer

In documenting the nature, timing, and extent of audit procedures, it is essential for the auditor to indicate who performed the work and the date of the review. This ensures accountability and provides a clear timeline of the audit process.

Question 15

Audit documentation

Accepted Answer

Audit documentation is considered the property of the auditor, not the client, the AICPA, or exempt from court review. This allows auditors to maintain control and confidentiality over their work papers, while still being subject to legal review if necessary.

Question 16

What are the types of fraud that might occur in a company?

Accepted Answer

Misstatements can occur from fraudulent financial reporting (choice B) or misappropriation of assets (choice C), both of which constitute fraud. Misstatements may also occur in the other scenarios listed (choices A, D, and E), but they do not necessarily indicate fraud.

Question 17

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

Accepted Answer

The nature, timing, and extent of audit procedures should include information about when the work was completed and when it was reviewed (B and D). It is not necessary to indicate who authorized the work or the results of the risk assessment. It may be helpful to indicate the overall conclusion or results of the work, which would be addressed in the review of the work (C). Therefore, G is the best choice.

Question 18

The auditor's responsibility for fraud detection is to:

Accepted Answer

The auditor's responsibility for fraud detection is to plan the audit so sufficient appropriate evidence is gathered to determine whether the financial statements are free of material misstatement from fraud or error. This means that the auditor must consider the risk of fraud and design the audit procedures accordingly to obtain reasonable assurance that the financial statements are free from material misstatements caused by fraud or error. Option C best represents this responsibility.

Question 19

The primary responsibility for fraud prevention and detection rests with

Accepted Answer

The management of the company has the primary responsibility for fraud prevention and detection. The management should implement effective internal control systems, establish a code of ethics, monitor transactions and financial reporting, and provide fraud awareness training to employees. The auditor and legal counsel may also play a role in fraud prevention and detection, but their responsibilities are secondary to the management's role. Law enforcement authorities get involved after a fraud has been committed, so their involvement is not considered a preventive measure.

Question 20

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

Accepted Answer

The answer of Significant findings are to be documented by...

Quiz 5: Audit Evidence and the Auditors Responsibility for Fraud Detection

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

Audit documentation

The auditor should complete the assembly of the final audit file within 45 days of the report release date (60 days for private companies) .After the 45/60 day time period

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

The auditor should complete the assembly of the final audit file within 45 days of the report release date (60 days for private companies) .After the 45/60 day time period

Audit documentation

Audit documentation

The auditor should complete the assembly of the final audit file within 45 days of the report release date (60 days for private companies) .After the 45/60 day time period

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

Audit documentation

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

Audit documentation

What are the types of fraud that might occur in a company?

In documenting the nature,timing,and extent of audit procedures,the auditor should indicate

The auditor's responsibility for fraud detection is to:

The primary responsibility for fraud prevention and detection rests with

Significant findings are to be documented by the auditor,including actions taken to address them and the basis for the final conclusion reached.Findings that might be significant include