Review of Subsequent Events and Going Concern Assumptions

AAA – Nov 2012 – L3 – SA – Q16 – Review of Subsequent Events and Going Concern Assumptions

Identifying the appropriate signatories for a Letter of Representation.

Question

The Letter of representation is normally signed by:

A. Managing Director and Chairman of the Board
B. Managing Director and Company Secretary
C. Managing Director and Finance Director
D. Chairman of the Board and Finance Director
E. Chairman of Audit Committee and the Managing Director

Answer

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Tags: Audit Documentation, Audit Procedure, Letter of Representation, Signatories
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2011 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions

Identifies going concern symptoms, audit procedures for evaluating going concern, and factors to assess continuation potential.

Question

When a company is experiencing going concern problems, it may exhibit various financial and non-financial symptoms.

Required:

(a) State FIVE financial and FIVE non-financial going concern symptoms.
(5 Marks)

(b) State the audit procedures you would adopt as an auditor to determine whether a client company is experiencing going concern problems.
(6 Marks)

(c) What other factors would you consider in assessing if the company can continue despite the going concern issues?
(4 Marks)

Answer

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Tags: Audit Procedures, Financial Stability, Financial Symptoms, Going Concern, Non-Financial Symptoms, Risk Assessment
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2011 – L3 – SAII – Q18 – Review of Subsequent Events and Going Concern Assumptions

Definition of audit procedures for recording transactions in the correct period.

Question

The audit procedures that ensure that transactions are recorded in the period to which they belong are known as…………………….

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Cut-off Testing, Period-Specific Transactions, Transaction Timing
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2011 – L3 – SAII – Q17 – Review of Subsequent Events and Going Concern Assumptions

Definition of a company's inability to meet financial obligations on time.

Question

The inability of a company to meet its financial obligations as and when due is called……………..

Answer

Find Related Questions by Tags, levels, etc.

Tags: Company Obligations, Financial obligations, Insolvency, Liquidity
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

Question

Which ONE of the following may not necessarily be a symptom of a going concern problem?

A. Redemption of debentures
B. Dividends in arrears
C. Existence of long overdue debtors
D. Heavy dependence on short-term funds for long-term needs
E. Excessive reliance on a supplier or customer

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Assessment, Financial Indicators, Going Concern, Risk Factors
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2018 – L3 – Q4 – Review of Subsequent Events and Going Concern Assumptions

Assessing a company's ability to continue as a going concern and forming an audit opinion on material uncertainties

Question

You are an audit senior in a firm of Chartered Accountants. You are about to commence work on the audit of B & Z Pharmaceuticals Limited, a family-owned and managed limited liability company. You have been informed by a business contact that the company has not been trading very successfully and is having difficulties with its bankers. However, you are not aware of any specific details.

The Engagement Manager on the audit is also aware of this information and is concerned about the ability of B & Z Pharmaceuticals Limited to continue in business for the foreseeable future. He has asked you to visit the company to ascertain the current state of affairs.

Required:

a. Prepare a list of questions that you would wish to ask and details of any information that you would wish to obtain from the Finance Director of B & Z Pharmaceuticals Limited, to enable you to identify indicators and assess the ability of the company to continue as a going concern. (16 Marks)

b. Explain briefly the audit opinion that you would give, assuming you concluded, after carrying out appropriate audit procedures, that there was a material uncertainty regarding the ability of the company to continue in business and management has included appropriate disclosures in the financial statements. (You are not required to draft the audit report). (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit opinion, Audit Procedures, Financial Disclosures, Financial Distress, Going Concern
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions

AAA – Nov 2012 – L3 – SA – Q16 – Review of Subsequent Events and Going Concern Assumptions

Identifying the appropriate signatories for a Letter of Representation.

Question

The Letter of representation is normally signed by:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Documentation, Audit Procedure, Letter of Representation, Signatories
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2011 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions

Identifies going concern symptoms, audit procedures for evaluating going concern, and factors to assess continuation potential.

Question

When a company is experiencing going concern problems, it may exhibit various financial and non-financial symptoms.

Required:

(a) State FIVE financial and FIVE non-financial going concern symptoms.
(5 Marks)

(b) State the audit procedures you would adopt as an auditor to determine whether a client company is experiencing going concern problems.
(6 Marks)

(c) What other factors would you consider in assessing if the company can continue despite the going concern issues?
(4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Financial Stability, Financial Symptoms, Going Concern, Non-Financial Symptoms, Risk Assessment
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2011 – L3 – SAII – Q18 – Review of Subsequent Events and Going Concern Assumptions

Definition of audit procedures for recording transactions in the correct period.

Question

The audit procedures that ensure that transactions are recorded in the period to which they belong are known as…………………….

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Cut-off Testing, Period-Specific Transactions, Transaction Timing
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2011 – L3 – SAII – Q17 – Review of Subsequent Events and Going Concern Assumptions

Definition of a company's inability to meet financial obligations on time.

Question

The inability of a company to meet its financial obligations as and when due is called……………..

Answer

Find Related Questions by Tags, levels, etc.

Tags: Company Obligations, Financial obligations, Insolvency, Liquidity
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

Question

Which ONE of the following may not necessarily be a symptom of a going concern problem?

A. Redemption of debentures
B. Dividends in arrears
C. Existence of long overdue debtors
D. Heavy dependence on short-term funds for long-term needs
E. Excessive reliance on a supplier or customer

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Assessment, Financial Indicators, Going Concern, Risk Factors
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

AAA – Nov 2018 – L3 – Q4 – Review of Subsequent Events and Going Concern Assumptions

Assessing a company's ability to continue as a going concern and forming an audit opinion on material uncertainties

Question

Required:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit opinion, Audit Procedures, Financial Disclosures, Financial Distress, Going Concern
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions

Topic: Review of Subsequent Events and Going Concern Assumptions

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AAA – Nov 2012 – L3 – SA – Q16 – Review of Subsequent Events and Going Concern Assumptions

Identifying the appropriate signatories for a Letter of Representation.

AAA – Nov 2011 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions

Identifies going concern symptoms, audit procedures for evaluating going concern, and factors to assess continuation potential.

AAA – Nov 2011 – L3 – SAII – Q18 – Review of Subsequent Events and Going Concern Assumptions

Definition of audit procedures for recording transactions in the correct period.

AAA – Nov 2011 – L3 – SAII – Q17 – Review of Subsequent Events and Going Concern Assumptions

Definition of a company's inability to meet financial obligations on time.

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

AAA – Nov 2018 – L3 – Q4 – Review of Subsequent Events and Going Concern Assumptions

Assessing a company's ability to continue as a going concern and forming an audit opinion on material uncertainties

AAA – Nov 2012 – L3 – SA – Q16 – Review of Subsequent Events and Going Concern Assumptions

Identifying the appropriate signatories for a Letter of Representation.

AAA – Nov 2011 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions

Identifies going concern symptoms, audit procedures for evaluating going concern, and factors to assess continuation potential.

AAA – Nov 2011 – L3 – SAII – Q18 – Review of Subsequent Events and Going Concern Assumptions

Definition of audit procedures for recording transactions in the correct period.

AAA – Nov 2011 – L3 – SAII – Q17 – Review of Subsequent Events and Going Concern Assumptions

Definition of a company's inability to meet financial obligations on time.

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

AAA – Nov 2018 – L3 – Q4 – Review of Subsequent Events and Going Concern Assumptions

Assessing a company's ability to continue as a going concern and forming an audit opinion on material uncertainties

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Topic: Review of Subsequent Events and Going Concern Assumptions

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AAA – Nov 2012 – L3 – SA – Q16 – Review of Subsequent Events and Going Concern Assumptions

Identifying the appropriate signatories for a Letter of Representation.

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AAA – Nov 2011 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions

Identifies going concern symptoms, audit procedures for evaluating going concern, and factors to assess continuation potential.

You're reporting an error for "AAA – Nov 2011 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions"

AAA – Nov 2011 – L3 – SAII – Q18 – Review of Subsequent Events and Going Concern Assumptions

Definition of audit procedures for recording transactions in the correct period.

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AAA – Nov 2011 – L3 – SAII – Q17 – Review of Subsequent Events and Going Concern Assumptions

Definition of a company's inability to meet financial obligations on time.

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AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

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AAA – Nov 2018 – L3 – Q4 – Review of Subsequent Events and Going Concern Assumptions

Assessing a company's ability to continue as a going concern and forming an audit opinion on material uncertainties

You're reporting an error for "AAA – Nov 2018 – L3 – Q4 – Review of Subsequent Events and Going Concern Assumptions"

AAA – Nov 2012 – L3 – SA – Q16 – Review of Subsequent Events and Going Concern Assumptions

Identifying the appropriate signatories for a Letter of Representation.

You're reporting an error for "AAA – Nov 2012 – L3 – SA – Q16 – Review of Subsequent Events and Going Concern Assumptions"

AAA – Nov 2011 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions

Identifies going concern symptoms, audit procedures for evaluating going concern, and factors to assess continuation potential.

You're reporting an error for "AAA – Nov 2011 – L3 – SB – Q5 – Review of Subsequent Events and Going Concern Assumptions"

AAA – Nov 2011 – L3 – SAII – Q18 – Review of Subsequent Events and Going Concern Assumptions

Definition of audit procedures for recording transactions in the correct period.

You're reporting an error for "AAA – Nov 2011 – L3 – SAII – Q18 – Review of Subsequent Events and Going Concern Assumptions"

AAA – Nov 2011 – L3 – SAII – Q17 – Review of Subsequent Events and Going Concern Assumptions

Definition of a company's inability to meet financial obligations on time.

You're reporting an error for "AAA – Nov 2011 – L3 – SAII – Q17 – Review of Subsequent Events and Going Concern Assumptions"

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

You're reporting an error for "AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions"

AAA – Nov 2018 – L3 – Q4 – Review of Subsequent Events and Going Concern Assumptions

Assessing a company's ability to continue as a going concern and forming an audit opinion on material uncertainties

You're reporting an error for "AAA – Nov 2018 – L3 – Q4 – Review of Subsequent Events and Going Concern Assumptions"

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