When the auditor has completed the tests of details of balances and enters phase 4 of the audit process, she must still perform audit procedures for which of the following?
A) contingent liabilities and employee compensation
B) contingent liabilities and subsequent events
C) subsequent events and contractual commitments
D) subsequent events and unrecorded liabilities

Question

Quizplus · Accepted Answer

Phase 4 of the audit process involves the overall review of the financial statements and ensuring all necessary disclosures have been made. This includes addressing any potential subsequent events (events occurring after the balance sheet date) and contingent liabilities (potential liabilities that may arise from past events) that may impact the financial statements. Therefore, option B, which includes both subsequent events and contingent liabilities, is the correct choice.

When the Auditor Has Completed the Tests of Details of Balances