Chapter 24 Homework- ACCT 470
Chapter 24 Homework The following questions deal with contingent liabilities and the review for subsequent events. Choose the best response. When a contingency is resolved subsequent to the issuance of audited financial statements, which correctly contained disclosure of the contingency in the footnotes based on information available at the date of issuance, the auditor should take no action regarding the event. Which of the following would be least likely to be included in a standard inquiry to the client's attorney? A request for the attorney to opine on the correct accounting treatment associated with an outstanding claim or pending lawsuit outcome An audit report was dual-dated for a subsequent event disclosed in the financial statements, which occurred after the completion of the evidence collection process but before the issuance of the financial statements. The auditor's responsibility for events occurring subsequent to the completion of the evidence collection process was limited to the specific events referred to. An example of an event occurring in the period between the end of the year being audited and the date of the auditor's report that normally will not require disclosure in the financial statements or auditor's report is decreased sales volume resulting from a general business recession
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