100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
CH. 24, 3 ACCT 5200 McCallen || with A+ Guaranteed Solutions. £8.73
Add to cart
Quickly navigate to
Preview
  2.  
  3. CH. 24, 3 ACCT 5200 McCallen
  4.  
  5. CH. 24, 3 ACCT 5200 McCallen

Exam (elaborations)

CH. 24, 3 ACCT 5200 McCallen || with A+ Guaranteed Solutions.
 0 purchase
  • Module
  • CH. 24, 3 ACCT 5200 McCallen
  • Institution
  • CH. 24, 3 ACCT 5200 McCallen

Perform additional tests for presentation and disclosure - Review for contingent liabilities - Review for subsequent events (post balance sheet review) - Accumulate final evidence and evaluate results - Issue audit report - Communicate with audit committee and management correct answers Steps to co...

[Show more]

Preview 2 out of 6  pages

Document information

  • August 25, 2024
  • 6
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

Subjects

  • perform additional tests for presentation and disc

Written for

  • CH. 24, 3 ACCT 5200 McCallen
  • CH. 24, 3 ACCT 5200 McCallen

Seller

avatar-seller
FullyFocus

Reviews received

Content preview

CH. 24, 3 ACCT 5200 McCallen || with A+ Guaranteed
Solutions.
Perform additional tests for presentation and disclosure - Review for contingent liabilities -
Review for subsequent events (post balance sheet review) - Accumulate final evidence and
evaluate results - Issue audit report - Communicate with audit committee and management
correct answers Steps to complete the audit:

Contingent liability correct answers a potential future obligation to an outside party (or an
impairment of assets) for an unknown amount resulting from activities that have already taken
place

- Potential future payment to an outside party or the impairment of an asset that resulted from an
existing condition
- Uncertainty about the amount of the future payment or impairment
- Outcome will be resolved by some future event or events correct answers 3 requirements for a
contingent liability to exist: Ex. (lawsuit filed but not yet resolved)

- Probable - the future event is likely to occur
- Reasonably possible - the chance of the future event occurring is more than remote but less
than likely
- Remote - the chance of the future event occurring is slight correct answers Likelihood of
occurrence:

Prob: reflected in F/S if possible, otherwise footnote
Reas. Prob: Footnote disclosure
Remote: No disclosure correct answers How to disclose of each likelihood of occurrence:
Probable:
Reasonable probable"
Remote:

- Pending or threatening litigation
- Income tax disputes
- Product warranties or defects
- Notes receivable discounted
- Guarantees of obligations to others
- Unused balances of outstanding letters of credit correct answers Examples of likely contingent
liabilities:

- Evaluate accounting treatment of known contingent liabilities to determine whether
management has properly classified the contingency
- Identify to the extent practical any contingencies not already identified by management correct
answers 2 primary objectives in verifying contingent liabilities:

, Commitments correct answers Agreement to commit the firm to a set of fixed conditions in the
future (all are either included in a separate footnote or with contingencies)

- Determine whether any contingencies exist
- Read minutes of meetings of the board of directors, committees of the board, and stockholders
- Review contacts, loan agreements, leases, and correspondence, including income tax filings,
from government agencies
- Examine, analyze legal expense for the period
- Confirm or otherwise document guarantees and letters of credit
- Inspect other documents for possible guarantees or other similar arrangements
- Obtain, analyze legal letters from the client's attorneys correct answers Audit procedures for
identifying contingent liabilities

Inquiry of client's attorney correct answers letter from the client requesting that legal counsel
inform the auditor of pending litigation or any other information involving legal counsel that is
relevant to financial statement disclosure

Subsequent event correct answers One that occurs between the balance sheet date and the date on
the auditors' report

- Must review transactions and events occurring after the balance sheet date
- To determine whether anything occurred that might affect the presentation or disclosure of the
current-period F/S correct answers Procedures required for subsequent events:

Direct effect (type 1)
No direct effect (Type 2) correct answers Types of subsequent events: when subsequent event
happens, auditor must distinguish between

Direct effect (Type I) correct answers Conditions that existed at the balance sheet date, helps
determine presentation/disclosure of account balances as of the balance sheet date, if found a
material weakness auditor must give an adverse opinion, if nothing was found they have to
disclaim opinion on internal control,
Requires adjustment of F/S for effects of events

- Management in determining account balances as of B/S sheet
- Auditors in verifying the balances correct answers Event or transaction provides additional
information to:

- Auditors use subsequent litigation activity (recorded estimate of litigation liability at B/S date is
settled for an amount that is different) to provide information regarding contingent liabilities at
the B/S dateBankruptcy by a customer with an outstanding A/R balance due to deteriorating
financial condition
- Disposal of equipment not being used in operations at a price below the current BV
- Sale of held to maturity investments at a price below recorded cost
- Settlement of litigation at an amount different from the amount recorded at year end correct
answers Common examples of direct effect (type 1)

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller FullyFocus. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £8.73. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

69411 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 15 years now

Start selling
£8.73
  • (0)
Add to cart
Added