Cash Flow Disclosure
The indirect method begins with this figure
What is net income?
Before sending a report to the partner or manager, the senior should prepare this review to help catch mistakes early.
What is a pre reference
A senior updates current-year balances but never verifies PY amounts to the issued statements. What type of error could survive all the way to issuance?
What is an incorrect prior-year comparative balance?
The management representation letter is dated one week after the audit report date. Why is that problematic?
What is because the dates should correspond at issuance
Prepaids and other assets normally fall into this cash flow category
What is operating?
A report is fully referenced and call-footed, but management decides to revise disclosures. What should happen before issuance?
What is re-performing reference and call-foot procedures over all affected areas?
A draft contains a debt footnote but no maturity schedule. The manager asks whether a disclosure requirement may have been missed. Which document should help identify the issue?
What is the disclosure checklist?
The report has completed call-and-foot procedures but no one performed the final "flip." What type of errors could still exist?
What are formatting, pagination, and presentation errors?
Owner distributions, common stock issuance, and borrowings on debt are this cash flow category.
What is financing?
For this procedure, Sabrina or Alisa may be asked to print a copy of the draft
What is call & foot?
These should begin during planning, not on the last day of fieldwork?
What are financial statements/reporting?
A binder has several unsigned workpapers, but all testing is complete. Why is issuance still inappropriate?
What is because completion of work alone does not replace required signoffs and documentation?
This person or whomever is preparing the report, should complete the disclosure checklist?
Who is the senior?
The engagement team completed all testing but never revisited F-060 after posting final audit adjustments. Why is that a problem?
What is the final analytical review no longer being based on the final financial statements and adjusted trial balance?
This checklist should be reviewed during planning to consider whether triggering events may indicate substantial doubt
What is the going concern checklist
You have rolled off of a job, but the senior/manager has left review notes on the job. What do you do?
Communicate to your previous and current senior, and discuss going back to clear the review notes in a timely manner.
One common cash flow pitfall is forcing small differences here instead of tying amounts to statements or footnotes.
What is plugging immaterial differences to the wrong place in the cash flow workpaper?
You are one day from issuance. The financial statements tie out, references are complete, and all workpapers are signed off. However, the disclosure checklist has not been updated for a major acquisition completed during the year. What is the primary audit risk?
What is issuing financial statements with incomplete or missing required disclosures?
A note disclosure agrees perfectly to its supporting schedule. The supporting schedule agrees perfectly to a lead schedule. The lead schedule agrees perfectly to the trial balance. During review, the information is still found to be wrong. How is this possible
What is that all schedules were built from incorrect underlying support?
This is the maximum number of days allowed to finalize documentation after the report is issued.
What is 60 days?