Answer(s): A
Explanation:
Choice "a" is correct. The auditor has no active responsibility to make continuing inquiries
between the date of the auditor's report and the date on which the report is submitted. The
auditor's active responsibility stops on the date of the auditor's report. Choice "b" is incorrect.
The auditor does have an active responsibility to make continuing inquiries between the date of
the financial statements and the date of the auditor's report. Choice "c" is incorrect. The auditor
does have an active responsibility to make continuing inquiries between the date of the financial
statements and the date on which sufficient appropriate audit evidence has been obtained.
Choice "d" is incorrect. The auditor has no active responsibility to make continuing inquiries
after the date of the auditor's report.
QUESTION: 87
Which of the following procedures would an auditor most likely perform to obtain evidence about
the occurrence of subsequent events?

A. Confirming a sample of material accounts receivable established after year-end.
B. Comparing the financial statements being reported on with those of the prior period.
C. Investigating personnel changes in the accounting department occurring after year-end.
D. Inquiring as to whether any unusual adjustments were made after year-end.

Answer(s): D
Explanation:
Choice "d" is correct. An auditor would most likely inquire as to whether any unusual
adjustments were made after year-end that would require adjustment to and/or disclosure in the
year-end financial statements. Choice "a" is incorrect. Obtaining evidence about A/R that were
established after year-end would not provide the auditor with information about subsequent
events, since any information about these A/R would not require adjustment to or disclosure in
the prior year financial statements. Choice "b" is incorrect. Comparing the financial statements
being reported on with those of the prior period is not a very good source of subsequent event
information. Choice "c" is incorrect. Changes in accounting personnel at any time would
probably not result in any subsequent event financial statement adjustment or disclosure.
QUESTION: 88
Which of the following events occurring after the issuance of an auditor's report most likely
would cause the auditor to make further inquiries about the previously issued financial
statements?

A. An uninsured natural disaster occurs that may affect the entity's ability to continue as a going
concern.
B. A contingency is resolved that had been disclosed in the audited financial statements.
C. New information is discovered concerning undisclosed lease transactions of the audited
period.
D. A subsidiary is sold that accounts for 25% of the entity's consolidated net income.

Answer(s): C
Explanation:
Choice "c" is correct. The question addresses the subsequent discovery of facts that may have
existed at the balance sheet date. Such events will often require an adjustment to the financial

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