audit exam 4

Subsequent Event

transaction or event that occurs between year-end and date of the auditor’s report

Type 1 of Subsequent Event

• events that existed at the date of the F/S

• knew about event, but didnt get a big deal until after year end

• make an entry- existing event that had not been resolved

Type 2 of Subsequent Event

• events that arose following the date of the F/S

• didnt have knowledge of the event beforehand

• disclosure- brand new event

Engagement Letter

• auditors to client

• before engagement

• written

Acceptance letter

• client to auditors

• before engagement

• written

Attorney Letter Response

• attorney to auditors

• near date of auditor’s report

• written

Written Representations

• client to auditors

• date of the auditor’s report

• written

internal control deficiencies

• auditors to those charged with governance

• after audit

• oral or written

Communications with those charged with governance

• auditors to those charged with governance

• after audit

• oral or written

Management Letter

• Auditor to client

• after audit

• oral or written

Departure from GAAP

qualified

scope limitation

qualified

audit of group F/S

unmodified

consistency

unmodified

going-concern

unmodified

other information

unmodified

required supplementary info

emphasis of matter

unmodified

special purpose framework

unmodified

specified elements

unmodified

lack of independence

disclaimer

association with unaudited F/S

disclaimer

Modified/Qualified

a material GAAP

A material GAAS or scope

Unmodified/Unqualified

assume unless told otherwise

Disclaimer

• pervasive scope or GAAS limitation or lack of independence

• ZZZ best case

• The financial statements do not present fairly

Adverse

• pervasive GAAP departure