Integrated Audit Practice Case SEVENTH EDITION Armond Dalton Publishers, Inc. Okemos, Michigan David S. Kerr l Randal J. Elder l Alvin A. Arens Assignment TEN Discussion Questions

Q-1 What period is covered by the auditor's review for subsequent events? Give an example of a subsequent event that should result in disclosure and a subsequent event that would require adjustment to the financial statements.

Q-2 Assume you learn of a subsequent event after the date of the audit report (end of audit fieldwork) but before the audit report has been issued. How should you address this type of subsequent event?

Q-3Your preliminary judgment of materiality was based on net income. Why is it necessary to compare unadjusted misstatements to other bases of materiality? What should the auditor do if the unadjusted misstatements exceed one or more materiality thresholds?

Q-4 Why must the auditor review and obtain the client's approval of adjusting journal entries before posting them to the trial balance? What should the auditor do if the client does not agree with the proposed adjustments?