Question

What are examples of information commonly found in a permanent file in auditing?

a) Current-year financial statements, management representation letters, client correspondence, and legal agreements.
b) Audit programs, working papers, adjusting journal entries, and bank statements.
c) Organizational charts, contracts, long-term lease agreements, and depreciation schedules.
d) Client's trial balance, audit planning documents, confirmations of accounts receivable, and inventory count sheets.

Answer 1

Correct Answer is A) .The information commonly found in a permanent file in auditing includes current-year financial statements, management representation letters, client correspondence, and legal agreements.

Step-by-step explanation:

The correct answer is option a) Current-year financial statements, management representation letters, client correspondence, and legal agreements. These are examples of information commonly found in a permanent file in auditing. Current-year financial statements provide a snapshot of the company's financial performance, while management representation letters and client correspondence provide evidence of management's assertions and communications. Legal agreements are important for understanding the contractual obligations and legal considerations of the company.

This type of file contains data that is of a continual nature and will be relevant to multiple accounting periods. Items such as audit programs, working papers, adjusting journal entries, and bank statements are typically part of the current year’s audit file rather than a permanent file.