What reporting is appropriate for a loss contingency that does not qualify for recording at the present time?

Q: What should an auditor do if they discover they have forgotten to perform a substantive procedure?

A: Audit Procedure: A specific procedure undertaken by an auditor to procedure evidence in a particular…

Q: Describe the purpose and give examples of audit procedures in the search for unrecorded liabilities.

A: The search of unrecorded liabilities is the set of procedures designed to yield audit evidence of…

Q: Which of the following is the postclosing trial balance not designed to verify?

A: The objective of this question is to understand what the postclosing trial balance is not designed…

Q: What does an audit procedures should be applied to Required Supplementary Information?

A: Definition:   Audit report: An audit report refers to the written report issued by an auditor to…

Q: Meaning and difference between the permanent audit file and the current audit file?

A: Permanent audit files: Permanent audit files are the records that are used to preserve the documents…

Q: auditor

A: an auditor distinguish between an adjusting event and non-adjusting event as follow

Q: In substantive procedures, why is the emphasis on the completeness assertion for liabilities instead…

A: Substantive procedures are the activities performed to ensure that there is no material misstatement…

Q: Secondary purpose of audit documentation is to provide adequate defense in case of litigation for…

A: Audit documentation, often known as working papers as well as work papers, seems to be a work…

Q: what types are frauds are possible in revenue cycle?

A: Introduction: The revenue cycle is a method of defining and maintaining the processes used for the…

Q: do deficiencies in internal control not always lead to material misstatement when recording…

A: internal controls rules and procedures that are implemented in order to ensure the integrity and…

Q: What is the general presumption for auditing Ending Balances?

A: Auditing:                   It is a systematic verification of the books of accounts of an…

Q: How does audit risk relate to audit evidence?

A: Audit Evidence   The information obtained by the auditor from numerous sources (finance records,…

Q: What alternative procedures should be applied to accounts that do not return confirmations?

A: Confirmation of accounts receivable:  When the auditor has examined the documents of the clients…

Q: What are the differences between an external audit and an internal audit?

A: Internal audit is performed within organization by the auditor appointed by management.

Q: How is Audit Risk calculated?

A: Definition:   Audit Risk: The risk that arises when an auditor does not find any misstatement…

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.