Question: TRUE FALSE QUESTIONS 1 The going concern evaluation is based on information

1. The going-concern evaluation is based on information obtained from normal audit procedures performed to test management's assertions; no separate procedures are required, unless the auditor believes that there is substantial doubt about the client's ability to continue as a going concern.
2. Auditors should not issue a going-concern audit opinion if it would be a self-fulfilling prophecy that the company will, indeed, go bankrupt.
3. Performing analytical review procedures in the final review phase of the audit is optional.
4. The auditor's expectations when performing final analytical review procedures can be less precise than those for substantive analytics.
5. Section 404 of SOX requires the signing officers of publicly traded companies (usually the CEO and CFO) to certify, among other things, that the financial statements are fairly presented in accordance with GAAP.
6. One of the purposes of a management representation letter is to confirm oral responses obtained by the auditor earlier in the audit and the continuing appropriateness of those responses.
7. Type I subsequent events provide evidence about conditions that existed at the balance sheet date, while Type II subsequent events provide evidence about conditions that did not exist at the balance sheet date, but that may require disclosure.
8. An example of a Type I subsequent event would be when a significant lawsuit is initiated relating to an incident that occurred after the balance sheet date.
9. If after the audit report date the auditor discovers that an important audit procedure was not performed, then SOX requires that the auditor file a Form 8K with the SEC.
10 .An example of a situation in which the auditor discovers omitted procedures after the report date would be one in which the auditor failed to confirm receivables and this fact comes to light as part of an internal review program.

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  • CreatedSeptember 22, 2014
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