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WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
WRAP-UP PHASE
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WRAP-UP PHASE

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  • 1.  
  • 2. WRAP-UP PHASE
    • Search for unrecorded liabilities & significant subsequent events
    • Summarize & conclude
    • Partner, manager & senior review
  • 3. SEARCH FOR UNRECORDED LIABILITIES & SIGNIFICANT SUBSEQUENT EVENTS
    • What period are we talking about. . . ?
    • -- From year-end / December 31
    • -- To last day of field work
  • 4. SEARCH FOR UNRECORDED LIABILITIES & SIGNIFICANT SUBSEQUENT EVENTS
    • What are we looking for . . . ?
    • -- Two kinds of unrecorded
    • liabilities
    • -- Two kinds of significant
    • subsequent events
  • 5. TWO KINDS OF UNRECORDED LIABILITIES
    • Known liabilities
    • Contingent liabilities
    • -- Remote
    • -- Reasonably possible
    • -- Probable
  • 6. CONTINGENT LIABILITY Record, disclose &/or ignore depending upon probability
  • 7. FASB 5 LEVELS OF PROBABILITY
    • REMOTE - Don’t disclose or record
    • REASONABLY POSSIBLE - Disclose
    • PROBABLE & MEASURABLE -
    • - Record and disclose
    • - If range of loss possible, record lower end of range and disclose possible additional loss
  • 8. TWO KINDS OF SIGNIFICANT SUBSEQUENT EVENTS
    • Events confirming a condition existing at year-end
    • Events discretely related to subsequent period
  • 9. FIRST KIND OF SIGNIFICANT SUBSEQUENT EVENT Event that confirms an already existing situation at year-end
  • 10. CONFIRMS AN EXISTING SITUATION
    • Lawsuit settled after year-end
    • Customer files for bankruptcy after year-end
    • Record adjustment on y/e financial statements
  • 11. SECOND KIND OF SIGNIFICANT SUBSEQUENT EVENT Event that relates discretely to the following year
  • 12. RELATES DISCRETELY TO FOLLOWING YEAR
    • Factory burns down on Jan 18
    • Airliner crashes at O’Hare on Feb 20 killing 328 people
    • Failure to disclose in notes to F/Ss makes F/Ss misleading
  • 13. SEARCH FOR UNRECORDED LIABILITIES & SIGNIFICANT SUBSEQUENT EVENTS
    • Search for unrecorded payables
    • Review interim financial statements
    • Review significant books of account
    • Obtain legal letters
  • 14. SEARCH FOR UNRECORDED LIABILITIES & SIGNIFICANT SUBSEQUENT EVENTS
    • Review minutes & obtain minute representation letter
    • Make inquiries of management
    • Obtain management representation letter
  • 15. SEARCH FOR UNRECORDED PAYABLES
    • Relates to audit of A/P
    • Search through end of audit
    • Examine subsequent C/Ds
    • Propose PJE for unrecorded
  • 16. REVIEW LATEST INTERIM FINANCIAL STATEMENTS
    • Internal monthly F/Ss prepared for January or February
    • Look for large, unusual variations from audited F/Ss
    • Investigate until explanation found
  • 17. REVIEW SIGNIFICANT BOOKS OF ACCOUNT
    • General ledger
    • General journal
    • Cash receipts journal
    • Sales journal
    • Purchases journal
  • 18. REVIEW SIGNIFICANT BOOKS OF ACCOUNT
    • Review through end of audit
    • Review for large, unusual activity
    • Investigate unusual items to resolution
  • 19. OBTAIN LEGAL LETTERS
    • Standard request on page 715
    • Addresses asserted & unasserted claims
    • FASB 5 standards
    • Confirm understanding
    • Dated close to last day
    • Difficulties with attorneys
  • 20. REVIEW MINUTES
    • Obtain minutes thru last day
    • Agenda & resolutions for recent meetings
    • Obtaim minute representation letter from Corporate Secretary
  • 21. MAKE INQUIRIES OF MANAGEMENT
    • On last day of fieldwork
    • Use checklist
    • Discuss with CEO & CFO
  • 22. OBTAIN MANAGEMENT REPRESENTATION LETTER
    • Prepare draft for management
    • Dated last day of fieldwork
    • Signed by CEO & CFO
    • Formalize oral & implied reps(720)
    • Qualified opinion if management won’t sign
  • 23. MANAGEMENT REP LETTER
    • Management primarily responsible
    • Financial statements present fairly
    • Specific financial statement matters
    • Issues addressed during audit
    • Opinions of management
    • Plans/intentions of management
    • All records available/none withheld
  • 24. SUMMARIZE & CONCLUDE
    • Proposed journal entry schedule
    • Final engagement memo
  • 25. REVIEW PROCESS
    • Senior review
    • Manager review
    • Partner review
  • 26. REVIEW PROCESS - All procedures complete - Sufficient evidence - GAAP & GAAS correct
  • 27. ISSUE REPORT PHASE The Sixth Phase of the Audit Process
  • 28. ISSUE REPORT PHASE RIGHT . . . EXACTLY RIGHT . . . ON THE FIRST TRY! ! !
  • 29. PROCESSING THE REPORT
    • Senior drafts report
    • Review by client & audit team
    • Processing changes
    • Comparing (calling) & footing
    • Referencing by another senior
    • Second partner review
    • Signing by partner
  • 30. ISSUE REPORT
    • Unqualified report
    • Qualified report
    • - Scope limitation
    • - GAAP deviation

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