Problem 7-14 Points Hint-See Ch. 18 Place the correct response to each of the fo
ID: 2536397 • Letter: P
Question
Problem 7-14 Points Hint-See Ch. 18 Place the correct response to each of the following on the answer sheet 1.Which must management communicate to the audit committee? Known Material Weaknesses Yes Yes Known Significant Deficiencies Yes A) Yes C) D) 2.Which must the auditor communicate to management? Known Significant Deficiencies A) B) C) D) Known Material Weaknesses Yes Yes Yes No Yes 0 3.According to PCAOB standards, determining the allowance for doubtful accounts is referred to as a(n) A. Substantive transaction. B. Routine transaction C. Nonroutine transaction. D. Accounting estimate transaction.Explanation / Answer
1. Answer is A- Both Known material weaknesses & known significant deficiencies should be communicated to audit committee.
2. Answer is A- Both Known material weaknesses & known significant deficiencies should be communicated to management.
3. Answer is D- According to PCAOB standards, allowance for doubtful accounts is referred as Accounting estimate transaction.
4. Answer is A- SEC10 K Filing will include Unqualified audit report & adverse internal audit control report.
5. Answer is A- COSO Internal control framework is most likely to beD used by the client in its internal control assessment.
6. Answer is B- Unqualified is the appropriate audit report in this case.
7. Answer is D- Identification of the framework used for evaluating internal control must be included in management's report internal control under sec 404 of the Sarbanes / Oxley Act of 2002.