Auditing and Assurance Services 1st Edition by Iris Stuart

Exercise 4

Contingent liabilities and subsequent event documentation. Before you sign off on the audit, you need to determine that sufficient audit work has been done to determine whether contingent liabilities and subsequent events have been recorded in accordance with the applicable financial reporting framework at year-end.
a. Describe the audit evidence the partner would expect to find in the work papers to determine whether this information has been correctly recorded and disclosed in the financial statements.
b. What alternatives are available to the partner if the audit evidence indicates that disclosure is inadequate for these items