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Which of the following procedures should an auditor generally perform regarding subsequent events?
Suggested Answer: A
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Choice 'a' is correct. An auditor's communication of internal control related matters noted in an audit usually should be addressed to management and those charged with governance.
Choices 'b', 'c', and 'd' are incorrect. The director of internal auditing, the chief financial officer, and the chief accounting officer all would have access to the letter; however, it would not be addressed to them since they do not have the same level of authority and responsibility to the shareholders as management and those charged with governance.
46 comments · newest first
EA
Earleen
10 months ago
C is key, but I’m surprised it’s not mentioned more often!
LO
Loise
11 months ago
Wait, are we really still doing second requests? Seems outdated.
EA
Earleen
11 months ago
Totally agree with A, it’s crucial for accuracy.
KA
Kayleigh
11 months ago
I think D is more important, though.
LI
Lizette
11 months ago
A is definitely a must-do for auditors!
JA
Jacki
12 months ago
Comparing interim financials to the audited statements seems like a solid approach for identifying subsequent events, so I’m thinking option A could be correct.
MA
Marsha
12 months ago
I feel like communicating material weaknesses is more about internal controls than subsequent events, so I'm leaning away from option C.
DA
Dalene
12 months ago
I remember practicing a question about reviewing bank statements, so option D might be relevant here, but I can't recall the specifics.
DA
Daren
1 year ago
I think option A sounds familiar, but I'm not entirely sure if it's the right procedure for subsequent events.
LE
Leonor
1 year ago
Based on my understanding, the auditor should compare the latest available interim financial statements with the audited financial statements to identify any significant events that occurred after the reporting period. This is a standard procedure for subsequent event review.
LO
Lorean
1 year ago
I'm a bit hesitant on this one. While communicating material weaknesses is important, I don't think that's the correct procedure for addressing subsequent events. I'll need to review my notes to be sure.
LI
Lisha
1 year ago
The key here is to focus on subsequent events. Reviewing the latest interim financial statements would be the best way to identify any material events that occurred after the balance sheet date.
MY
Myra
1 year ago
Hmm, I'm not entirely sure about this one. I think it might have something to do with reviewing the cut-off bank statements, but I'm not confident that's the right approach.
RO
Roxane
1 year ago
This is a straightforward question. The auditor should generally compare the latest available interim financial statements with the financial statements being audited to identify any subsequent events.
DE
Deandrea
1 year ago
Ah, this is a tricky one. I'm not entirely sure about the relationship between unit tests and refactoring. I'll need to revisit my notes on that topic before answering.
LI
Ligia
1 year ago
I've got a good feeling about ENCKEYS. That seems like the most logical choice based on what we've covered in class.
MA
Martina
1 year ago
Hmm, I'm not entirely sure about this. I'll have to review my notes on IT governance to figure out the right approach.
CA
Casandra
1 year ago
Hmm, I'm not totally sure about this one. I know APIs are used for cloud integration, but I'm not confident that's the only option. I might need to review my notes on cloud architecture to be sure.
CA
Casie
1 year ago
I'm not entirely sure about this one. The fair value has increased from grant date to reporting date, so I'm not sure if that affects the accounting treatment. I'll need to think this through step-by-step.
EL
Elke
1 year ago
Subsequent events? More like 'subsequent shenanigans,' am I right? Better have those bank statements on lockdown, folks!
EL
Eliz
1 year ago
D) Review the cut-off bank statements for several months after the year-end.
EA
Earnestine
1 year ago
C) Communicate material weaknesses in the internal control structure to those charged with governance.
RI
Rikki
1 year ago
B) Send second requests to the client's customers who failed to respond to initial accounts receivable confirmation requests.
ME
Mee
1 year ago
A) Compare the latest available interim financial statements with the financial statements being audited.
KA
Kara
1 year ago
Hmm, Option C is interesting, but it's more about communicating control weaknesses, not subsequent events. Gotta keep our eye on the ball here, folks.
LE
Leontine
1 year ago
D) Review the cut-off bank statements for several months after the year-end.
AN
Annalee
1 year ago
B) Send second requests to the client's customers who failed to respond to initial accounts receivable confirmation requests.
JU
Justine
1 year ago
A) Compare the latest available interim financial statements with the financial statements being audited.
WY
Wynell
1 year ago
Hold up, why are we even considering Option B? That's more for the confirmation process, not subsequent events. This is a no-brainer - Option D all the way!
DE
Dean
1 year ago
Let's focus on what's necessary for subsequent events. Option D is the best choice for the auditor to perform.
PE
Pearly
1 year ago
Yeah, Option D is more relevant to subsequent events. It's important to review the cut-off bank statements.
CA
Carrol
1 year ago
Definitely, Option D is the best choice for ensuring we cover all our bases with subsequent events.
SH
Sherell
1 year ago
Yeah, Option D makes the most sense for subsequent events. It's all about reviewing those bank statements.
TA
Tanesha
1 year ago
I agree, Option B seems out of place here. Option D is definitely the way to go.
MA
Mary
1 year ago
I agree, Option B seems out of place here. Option D is definitely the way to go.
GL
Glenna
1 year ago
I'm not sure about that. Comparing the latest interim financial statements with the audited ones (Option A) seems like a more comprehensive approach to subsequent events.
VA
Vanda
1 year ago
True, it's all about making sure we have a complete picture of the company's financial situation.
IO
Iola
1 year ago
Sending second requests to customers who didn't respond to initial confirmation requests could also be important.
TI
Timmy
1 year ago
Yeah, that way we can see if there are any significant changes that need to be addressed.
JA
Janine
1 year ago
I think comparing the latest interim financial statements with the audited ones is a good idea.
NO
Nobuko
1 year ago
Option D seems like the obvious choice here. Reviewing the cut-off bank statements is crucial for identifying any subsequent events that could impact the financial statements.
QU
Quentin
1 year ago
User 2: Definitely, it's a key procedure to ensure the financial statements are accurate.
MA
Maile
1 year ago
User 1: I agree, reviewing the cut-off bank statements is important for catching any new events.
SA
Salley
2 years ago
I believe reviewing the cut-off bank statements for several months after the year-end is also crucial to detect any potential errors or fraud.
ME
Meghan
2 years ago
I agree with Kathryn. It's important to ensure consistency and accuracy in the financial statements.
KA
Kathryn
2 years ago
I think the auditor should compare the latest available interim financial statements with the financial statements being audited.