The purpose of this assignment is to understand the different considerations needed at the completion of an audit, and the different types of audit reports that can be issued.

After viewing the unit material, apply critical thinking when answering the following questions. Submit your responses in a Microsoft Word document.

1. Define the term "contingent liability" and discuss the criteria used to classify these events or conditions. Provide some examples of contingent liabilities. What is the difference between a contingent liability and a commitment?
2. Identify the two primary types of subsequent events that require consideration by management and evaluation by the auditor and give two examples of each type.
3. Discuss the steps used by an auditor to evaluate an entity's ability to continue as a going concern.
4. State the two primary purposes of the management representation letter.
5. What information is typically requested in a legal letter to an entity's attorney?
6. The following four situations require a modification to the standard unqualified audit report for public companies. Identify the modification required for each.

a. Opinion based in part on the report of another auditor.

b. Going concern.

c.Lack of comparability.

d.Emphasize a matter.

7.For each of the following situations, indicate what type of audit report is most appropriate.

a.The auditor lacks independence in fact, but not necessarily in appearance.

b.There is a scope limitation and it is material, but the overall financial statements are still presented fairly.

c.The uncorrected misstatements are immaterial.

d.There is a departure from GAAP and it is pervasively material.

8.Discuss three circumstances that prohibit the auditor from issuing an unqualified/unmodified opinion and the types of reports that the auditor may issue for a financial statement audit because of these circumstances.

9.Discuss the new enhancements implemented by the new PCAOB reporting standards for public entities.