Question

R14-3 Discuss the auditor's responsibility for detecting subsequent events prior to the completion of field work. LO2 R14-4 Explain the process of "engagement wrap-up?" Why is it important? LO3 R14-5 Provide an example of why an auditor would reevaluate control risk near the end of the audit. Provide a different example of why an auditor would reevaluate fraud risk near the end of the audit. LO3 R14-6 Discuss actions an auditor would take when misstatements identified during the audit are not corrected by the client. LO3 R14-7 Explain the process of an engagement quality control rovlow. LO3 R14-8 What are the audit file assembly deadlines and the audit file retention policies for the audit files for public and private company audits ? Provide an analysis of why you think the deadlines and policies are different for public versus private company audits. LO3 R14-9 Evaluate why the accounting assumption of "going concern" is of interest to auditors. Are there specific audit procedures that must Y be performed related to the going concern assumption? Why or why not? LO4

Answer 1

R 14 - 3 Auditor's responsibility for detecting subsequent events prior to completion of field work.

• Auditor is responsible to consider financial impact on the financial statement, of all events that take place before the signing of Audit report.
• Assess the financial impact of the subsequent events as may have been determined by the management by reviewing the accounting document, board minutes, surveyor's report etc.
• If the event needs to be disclosed in the financial statements, because of its materiality, advise the management to make appropriate disclosure.
• If appropriate disclosure is not made or the disclosure is inappropriate, consider modification of the audit report.

R 14 - 4 Process of engagement wrap - up

• The process of engagement wrap - up involves the auditor finalising  an open items before issuing their audit report.
• The finalisation process could include completing additional audit procedure to ensure that sufficient and appropriate audit evidence is held on which to base audit opinion.

R 14 - 6 Auditor Action

• If misstatement identified during audit is not corrected by management, auditor should made appropriate disclosure and if required made modification in his report.

R 14 - 7 Engagement quality control review

• Engagement quality control review is a process designed to provide an objective evaluation, on or before the date of engagement report, of the significant judgments the engagement team made and the conclusion it reach in formatting report.