Question

At the conclusion of the audit, _______.

A. Auditors typically revaluate materiality decisions made during the audit to ensure it is still appropriate based on the results of audit procedures.
B. Auditors typically attempt to contact the prior auditor.
C. Auditors may attempt to contact the client's legal counsel.
D. Auditors ask management for recommendations on any needed adjustments to the accounts.

Answer 1

At the end of an audit, auditors reevaluate materiality decisions to confirm appropriateness against the audit findings and may propose financial statement adjustments if needed. The correct option is A.

Step-by-step explanation:

At the conclusion of the audit, Auditors typically revaluate materiality decisions made during the audit to ensure it is still appropriate based on the results of audit procedures. This involves reassessing whether the threshold set for materiality at the start of the audit still makes sense in light of the data gathered and the analyses conducted.

Should the auditors determine that some previously unadjusted misstatements are, in fact, material based on this re-evaluation, they might propose adjustments to the financial statements.

While contacting the prior auditor and the client's legal counsel may occur during the audit process in specific circumstances, they are not routine concluding activities. The primary auditor typically communicates directly with management regarding any necessary adjustments to the accounts, but they do not ask management for recommendations on these adjustments.