Audit and Assurance Practice Exam

What situation illustrates omitted procedures discovered after the audit report?

1. The auditor fails to confirm receivables during the audit.

2. The auditor notes discrepancies in financial statements.

3. The auditor conducts an internal review after the audit.

4. The auditor updates their skills after the audit.

The correct answer is: The auditor fails to confirm receivables during the audit.

The scenario in which the auditor fails to confirm receivables during the audit clearly illustrates omitted procedures discovered after the audit report. Confirmation of receivables is a critical audit procedure that helps validate the existence and correctness of recorded amounts. If this procedure is not performed, it can lead to significant inaccuracies in the audit findings and financial statements. Discovering that this procedure was omitted after the audit report has been issued indicates a lapse in the auditing process that could have serious implications, such as misstatements in the financial statements that affect stakeholders' decisions. The other options provided, while relevant to the auditing context, do not specifically illustrate omitted procedures discovered post-audit report. Noting discrepancies in financial statements involves identifying issues during or after the audit, but it does not emphasize a procedural omission. Conducting an internal review after the audit pertains to the auditor's self-assessment and quality control, not the discovery of omitted audit tasks. Updating skills is related to professional development but does not connect to specific audit procedures or findings. Thus, the failure to confirm receivables exemplifies a significant procedural omission that can directly impact audit validity.