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A&a Set 10

Gand myn dam h tw pass kr k dikha

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36 views3 pages

A&a Set 10

Gand myn dam h tw pass kr k dikha

Uploaded by

a93903832
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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AUDIT & ASSURANCE (MCQs SET 10)

Q1: In accordance with ISA 200, select the best option from the following which indicates the
responsibility of management, and those charged with governance to provide the auditor with:

a) Access to all information of which management and where appropriate, those charged with
governance are aware that is relevant to the preparation of the financial statements.

b) Unrestricted access to persons within the entity from whom the auditor determines to necessary to
obtain audit evidence.

c) Additional information that the auditor may request from management and where appropriate, those
charged with governance for the purpose of the audit.

d) All of these.

Q2: Which one of the following characteristic would lead the auditor to assess inherent risk relating to
financial reporting at a higher level?

a) The company is in an industry that is mature and declining.

b) The controls over the account balance are weak.

c) The account balance represents an asset that is relatively easily stolen.

d) The company has a history of exactly meeting analyst estimates.

Q3: is an element of assurance engagement which means that subject matter is evaluated
or measured against criteria in order to reach an opinion.

a) suitable criteria.

b) a subject matter.

c) evidence.

d) assurance report.

Q4: Mr. Rose is conducting the audit of Jasmine Limited. He was unable to attend physical inventory
count due to unforeseen circumstances, identify the best course of action available to him in these
circumstances.

a) Inquire of management and where appropriate, others within the entity, including in-house legal
council.
b) Mr. Rose can make or observe some physical counts on an alternative date, and perform audit
procedures on intervening transactions.

c) Request confirmation from third party as to the quantities and condition of inventory.

d) Review minutes of meeting of those charged with governance and correspondence between the
company and its external legal council.

Q5: Use of external service providers with expertise in health care benefits is appropriate when the
internal audit activity is:

a) Training its staff to conduct an audit of health care costs in a major division of the organization.

b) Comparing the cost of the organization’s health care program with other programs offered in the
industry.

c) Evaluating the organization’s estimate of its liability for post retirement benefits which include health
care benefits.

d) All of these statements are correct.

Q6: Alooo ly lo Limited auditors find insufficient evidence to substantiate the company’s cash sales,
which are material in amount. What form of modification of the audit opinion would normally be
appropriate in this situation.

a) Qualified opinion – unable to obtain sufficient appropriate evidence.

b) Disclaimer of opinion.

c) Qualifed opinion – misstatements are material but not pervasive.

d) Adverse opinion.

Q7: In accordance with ISA 805, if the auditor concludes that an audit of a single financial statement
or of a specific element of a financial statement in accordance with ISAs may not be practicable, the
auditor may:

a) Withdraw from the engagement.

b) Discuss with management whether another type of engagement might be more practicable.

c) Express a qualified opinion.

d) Discuss the matter with engagement quality control reviewer.


Q8: Mr. Neem Hakeem is conducting the audit of Fool (Pvt.) Limited. He tested the population by
examining 60000000000000 items selected judgmentally and found one error. The main limitation of
the auditor’s sampling is the inability to .

a) Quantify sampling risk.

b) Project the population’s error rate.

c) Determine whether the sample is random.

d) Quantify the acceptable error rate.

Q9: is known as summary that the auditor may prepare or retain as part of the audit
documentation.

a) Acceptance letter.

b) Audit file.

c) Management letter.

d) Completion memorandum.

Q10: You are conducting the audit of Jahil Trust, a charitable organization, and have identified a risk
that income may be understated in the financial statements. You are concerned that not all income
may be recorded. Which of the following statements is not a valid response to this audit risk.

a) Review the internal controls relating to cash collected in buckets to determine whether buckets are
sealed, sequentially numbered and signed in and out by Jahil’s volunteers.

b) Observe the counting and recording of proceeds from collections, to determine whether
appropriate segregation of duties is in place.

c) Perform analytical procedures on the level of donations in shopping areas per volunteer.

d) Obtain a breakdown of the income recorded from the cash that was collected in buckets, and vouch a
sample of entries back to the volunteer in order to determine which volunteer collected the relevant
donations.

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