As a Statutory Auditor, how would you deal with the following? The company incurred a loss of Rs. The chief accountant of the company proposes to adjust the aforesaid loss against the Revaluation reserve. During the year it relocated its operations to Ghaziabad. However the old lease cannot be cancelled and it has to continue for the next few years. The old factory can also not be re-let to another user.
Generally accepted accounting principles, or GAAP, are a set of rules that all public companies must follow and most private companies also follow. Many small businesses follow GAAP from a requirement by a lender or to have financial statements that are comparable to those of larger competitors. GAAP rules regard the restatement of financial statements that outline when a restatement–basically, a correction–is warranted and when it is not.
Dual-dated report – Auditor’s report with different dates: (1) the date of completion of fieldwork, and (2) the date a specific event occurred after completion of the .
Non-GAAP change in accounting principle What is the format of a report issuing a qualified opinion due to scope? A disclaimer of opinion contains: This should include evidence that what three things have occurred? Audit documentation has been reviewed. If the opinion differs from the previoius opinion, the reason s should be disclosed in a separate explanatory paragraph preceding the opinion paragraph. The explanatory paragraph should disclose the: Date of the auditor’s previous report Opinion type previously issued Changes that have occurred Statement “opinion While the auditor is responsible for investigating subsequent events until the date of the auditor’s report, the auditor has no active responsibility to make inquiries or perform auditing procedures after that date.
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LO Which of the following best describes the role of analytical procedures in the review stages of the audit engagement? A, B, C, D Which of the following statements is most likely to be included in an attorney letter? Griffin audited the financial statements of Dodger Magnificat Corporation for the year ended Dec. She completed gathering sufficient appropriate evidence on Jan 30 and later learned of a stock split voted by teh BOD on Feb 5.
Definition of dual date: Applied in the auditing process when an auditor discovers a financial event that occurred after the initial report date and does not want to take responsibility for .
The discovery of oil in had the potential to change the fortunes of Equatorial Guinea, and it did, in many ways. However, oil production has been in decline since , and oil is expected to run dry by unless new reserves are found. Suddenly the small country of about one million people occupying 28, square kilometers had a great but fleeting opportunity to deliver exemplary social services to its citizens in line with its human rights obligations.
Obiang raised expectations, repeatedly saying he would prioritize health services and education, but budgetary allocations to health and education have in fact been dismal: Instead the country invested heavily in large-scale infrastructure projects, which comprised 82 percent of its total budget in , an approach the IMF and World Bank have repeatedly criticized.
Expand Share Equatorial Guinea is one the smallest countries in Africa, with a population of around 1 million and a total landmass of just over 28, square kilometers.
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Accountant – Person skilled and trained in the recording and reporting of financial transactions. Accountants’ Report – Formal document that communicates an independent accountant’s: Expenses are recognized when incurred rather than when paid. Affiliated Company – Company, or other organization related through common ownership, common control of management or owners, or through some other control mechanism, such as a long-term LEASE.
Agency Fund – Fund consisting of ASSETS where the holder agrees to remit the assets, income from the assets, or both, to a specified beneficiary in due course or at a specified time. Alternative Dispute Resolution – An alternative to formal litigation which includes techniques such as arbitration, mediation, and a non-binding summary jury trial.
Dual dating of an audit report extends the auditors’ liability for disclosure through the later date for all areas of the financial statements False If management fails to list an unasserted claim in the letter of inquiry to a lawyer, the lawyer is NOT required to inform the auditors of the omission.
Our database also covers delisted securities dating back to over 20, delisted securities. Index history is provided on over indices including: That is, the open, high, low, close and volume are adjusted to show an accurate historical capital return of the security by removing the dilutive effects that such corporate actions would make on the data. The data is not adjusted for normal cash dividends.
Complex inter-exchange movements and corporate actions are catered for too. Database Completeness and Known Issues Trading Game believes that this is the most comprehensive retail-level historical securities database available. It has been built from dozens of sources and user contributions and has had extensive cross-checking of corporate actions, price and volume data.
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Covered members or their firms that were independent when they first issued an audit report may reissue that report or consent to its incorporation by reference, even if they are no longer independent, so long as they do not perform new procedures that would require updating the date or dual dating of the original report. In this connection, its is acceptable if necessary to assess the effect of recent facts on the original report to: Make inquiries of successor auditors Read subsequent financial statements Undertake similar procedures II.
Engagement Contractual Terms A.
Dating of the Independent Auditor’s Report However, if an event of the type requiring disclosure only (as discussed in section and) occurs between the date of the independent auditor’s original report and the date of the reissuance of such report, and if the event.
Information essential for a fair presentation should be set forth in the financial statements. Inadequate disclosure normally results in the auditor including the required information in the report. Omission of a statement of cash flows is considered inadequate disclosure. The auditor should never disclose information in the report that the client has not shown in the financial statements. The related financial statements were issued on March On April 8, the client suffered the loss of a significant portion of its plant facilities by fire.
The client requested additional copies of the previously issued report on May 5. Assuming no additional audit work has been or will be performed, the auditor should A. Disregard the casualty and reissue the original report with no change in date. What procedure may s he use to test for posting of fictitious accounts receivable? Tracing a sample of sales invoices to the accounts receivable subsidiary ledger. Vouching debits in the accounts receivable ledger to sales invoices and shipping documents.
Tracing a sample of shipping documents and sales invoices to the sales journal. Sending out negative confirmations.
AUDIT Notecards 1
No Answer A is incorrect. Refer to the correct answer explanation. Answer B is correct because while an attestation engagement will always have subject matter, it sometimes will not have a written assertion. For example, consider a situation in which the CPA’s client is not responsible for the subject matter, in such a circumstance it may not be possible to obtain a written assertion from the individual who is the responsible party.
Answer C is incorrect. Answer D is incorrect.
DUAL DATE is when a major event comes to the auditor’s attention between the report date and issuance of the report; the financial statements may include the event as an adjustment or disclosure.
Comment period closed on March 13, The standard was amended to modify certain disclosure requirements about the recoverable amount of impaired assets if that amount is based on fair value less costs of disposal. Recognition and Measurement, effective for annual periods beginning on or after January 1, The standard was amended to allow hedge accounting to continue in a situation where a derivative, which has been designated as a hedging instrument, is novated to effect clearing with a central counterparty as a result of laws or regulation, if specific conditions are met in this context, a novation indicates that parties to a contract agree to replace their original counterparty with a new one.
The Interpretation clarifies the obligating event that gives rise to a liability to pay a levy. Put Options Written on Non-controlling Interests Comment period for this draft interpretation closed on October 1,
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Which of the following best describes U. The interpretations of accounting rules and procedures by certified public accountants on audit engagements. The guidelines set forth by various governmental agencies that derive their authority from Congress. The pronouncements of the Financial Accounting Standards Board. Moreover, pronouncements of the SEC must be followed by registrants.
The auditor may use “dual dating,” for example, “February 16, 20__, except for Note __, as to which the date is March 1, 20__,” or may date the report as of the later date. In the former instance, the responsibility for events occurring subsequent to the original report date is limited to the specific event referred to in the note (or otherwise.
City schools criticized in financial audit Erica L. These are among dozens of findings outlined in a preliminary draft of an independent financial audit of the school system. The auditor says that the report is not final and the findings could be changed or resolved, though school officials have acknowledged many of the lapses in responses to the auditor. The auditors also found financial oversight to be so inadequate that officials paid millions of dollars in contracted work that wasn’t verified, lost 1, computers and allowed dozens of employees access to adjusting payroll even though it wasn’t required for their jobs.
The preliminary report by the Office of Legislative Audits, the state legislature’s research arm, was obtained by The Baltimore Sun. Its release comes as the schools chief has sought additional state funding from the General Assembly while repeatedly defending the cash-strapped system’s fiscal responsibility. City school officials said in their response that they were developing new policies and system improvements even as the audit was being conducted, particularly regarding payroll — the largest expense that auditors found to be the most vulnerable to problems.
In an interview, school system spokeswoman Edie House-Foster said the school system doesn’t have permission to discuss the findings before they are released publicly. Among the findings outlined in the draft document obtained by The Sun: Auditors found that the system paid four employees for more vacation days than they were entitled to under union contracts. Auditors also found that dozens of teachers and administrators were earning more than their pay grade or retained their higher salaries after being demoted.
Auditors found several instances of conflicts of interests. The employee owned the vendor business — and had the authority to approve purchases in the school system’s automated procurement system.