C-S4CFI-2011 Exam Questions and Answers

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NEW QUESTION: 1
On February 9, Brown, CPA, expressed an unqualified opinion on the financial statements of Web Co. On
October 9, during a peer review of Brown's practice, the reviewer informed Brown that engagement
personnel failed to perform a search for subsequent events for the Web engagement. Brown should first:
A. Take no additional action because subsequent events have no effect on the financial statements that
were reported on.
B. Request Web's permission to perform substantive procedures that would provide a satisfactory basis
for the opinion.
C. Assess the importance of the omitted procedures to Brown's present ability to support the opinion.
D. Inquire of Web whether there are persons currently relying, or likely to rely, on the financial
statements.
Answer: C
Explanation:
Explanation/Reference:
Explanation:
Choice "D" is correct. If an omitted audit procedure is discovered, the auditor should assess the
importance of the omitted procedure to the auditor's ability to support the opinion. It might be the case that
other audit procedures tended to compensate for the omitted procedure, in which case no further action
would be necessary.
Choice "A" is incorrect. The auditor would only request permission to perform substantive procedures if no
other procedures compensated for the missing one, and if there were persons relying (or likely to rely) on
the financial statements.
Choice "B" is incorrect. The auditor would need to determine whether there were persons relying (or likely
to rely) on the financial statements, but this would not be done unless it had already been determined that
no other audit procedures compensated for the missing one.
Choice "C" is incorrect. If the omitted audit procedure impairs the auditor's ability to support the opinion, no
other procedures compensated for the missing one, and there were persons relying (or likely to rely) on
the financial statements, the auditor would need to apply substantive procedures. Taking no action would
not be an acceptable response. Reporting on Other Information


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