Wiley Practitioner's Guide to GAAS 2023, 2nd Edition

16AU-C 501 Audit Evidence—Specific Considerations for Selected Items

• Technical Alert
• Scope
• Objectives of AU-C Section 501
• Definition of Term
• Requirements—Investments in Securities and Derivative Instruments
  • Valuation
• Requirements—Inventory Existence and Condition
  • Practice Alert
  • Timing and Extent of Inventory Observation
  • Inventory Held by a Third Party
  • Steps in the Observation of Inventory
  • Planning the Physical Inventory
  • Taking the Physical Inventory
  • External Inventory-Taking Firm
  • Inventory Observation Checklist
• AU-C 501 Illustrations—Inventory Observation
• Requirements—Litigation, Claims, and Assessments Involving the Entity
  • Accounting Considerations
  • Audit Procedures Other Than Inquiry of Lawyers
  • Inquiry of Client's Lawyer
  • Evaluation of Lawyer's Response
  • Refusal of Attorney to Respond
  • Lawyer on Board of Directors
  • Litigation Not Investigated by Lawyer
  • Litigation with Insurance Company
  • Reliance on House or Inside Counsel
  • Review of Interim Financial Information
• AU-C 501 Illustration—Litigation, Claims, and Assessments
• Requirements—Segment Reporting
• Requirements—Management's Specialists

TECHNICAL ALERT

Recently issued SASs 142, 143, 144, and 145 affect AU-C 501. The preface to this volume contains an overview of the SASs, and the changes are included in this chapter as relevant.

SCOPE

AU-C 501 addresses getting sufficient audit evidence under the guidance in Sections 330, 500, 540, and other relevant sections for:

• Investments in securities and derivative instruments ...