Which of the following statements regarding auditor documentation of the client\

Question

Which of the following statements regarding auditor documentation of the client's system of internal control is CORRECT? (Points : 2)        No one particular form of documentation is required, and the extent of documentation may vary.
       No documentation is absolutely necessary, although it is desirable.
       Documentation must include flow charts.
       Documentation must include procedural write ups. Question 2.2. To which of the following matters would materiality limits NOT apply when obtaining written client representations? (Points : 2)        Insignificant acts of fraud involving management.
       Noncompliance with contractual agreements.
       Unasserted claims and assessments.
       Losses from sales commitments. Question 3.3. An auditor of an issue is most likely to refer to one or more of the three General Standards in determining: (Points : 2)        The nature of the CPA's report qualification.
       Requirements for the review of internal control.
       The scope of the CPA's auditing procedures.
       Whether the CPA should undertake a certain audit engagement. Question 4.4. In auditing the financial statements of Star Corp., Land discovered information leading Land to believe that Star’s prior year’s financial statements, which were audited by Tell, require substantial revisions. Under these circumstances, Land should: (Points : 2)        Request Star to arrange a meeting among the three parties to resolve the matter.
       Request Star to reissue the prior year’s financial statements with the appropriate revisions.
       Notify Star’s audit committee and stockholders that the prior year’s financial statements cannot be relied on.
       Notify Tell about the information and make inquiries about the integrity of Star’s management. Which of the following statements regarding auditor documentation of the client's system of internal control is CORRECT? (Points : 2)        No one particular form of documentation is required, and the extent of documentation may vary.
       No documentation is absolutely necessary, although it is desirable.
       Documentation must include flow charts.
       Documentation must include procedural write ups.

Explanation / Answer

(1) The correct answer is option (A). No one particular form of documentation is required, and the extent of documentation may vary.

(2) The correct answer is option (B). Noncompliance with contractual agreements

(3) The correct answer is option (A).  The nature of the CPA's report qualification.

(4) The correct aswer is option (A). Request Star to arrange a meeting among the three parties to resolve the matter.

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