Category: Auditing Mcqs
In determining the level of materiality for an audit, what should not be considered?
A. Prior year’s errors
B. The auditor’s remuneration
C. Adjusted interim financial statements
D. Prior year’s financial statements
Analytical procedures issued in the planning stage of an audit, generally
A. Helps to determine the nature, timing and extent of other audit procedures
B. Directs attention to potential risk areas
C. Indicates important aspects of business
D. All of the above
Which of the following is NOT the responsibility of a company’s directors?
A. Reporting to the shareholders on the accuracy of the accounts
B. Establishment of internal controls
C. Keeping proper accounting records
D. Supplying information and explanations to the auditor
The independent auditor’s primary responsibility is to______________?
A. the directors
B. the company’s creditors (payables)
C. the company’s bank
D. the shareholders
Which of the following factors would least likely affect the quantity and content of an auditor’s working papers
A. The assessed level of control risk
B. The possibility of peer review
C. The nature of auditor’s report
D. The content of management representation letter
Which one of the following is NOT a duty of the auditor?
A. Duty to report to the company’s bankers
B. Duty to report to the members
C. Duty to sign the audit report
D. Duty to report on any violation of law
Which of the following statements is not correct about materiality?
A. Materiality is a relative concept
B. Materiality judgments involve both quantitative and qualitative judgments
C. Auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of an informed decision maker who will rely on the financial statements
D. At the planning state, the auditor considers materiality at the financial statement level only
Depreciation does not arise form _______
A. effluxion of time
B. use
C. obsolescence through technology be market changes
D. remarket expectation
When an auditor is proposed for removal from office, which one of the following is he NOT permitted to do?
A. Circulate representations to members
B. Apply to the court to have the proposal removed
C. Speak at the AGM/EGM where the removal is proposed
D. Receive notification of the AGM/EGM where the removal is proposed
Which of the following statements is INCORRECT?
A. An auditor may serve on the board of directors of an audit client.
B. An auditor who is an immediate family member of the director of an audit client must not be assigned to the audit team.
C. Purchasing goods from an audit client on normal commercial terms does not create a threat to the auditor’s independence.
D. An auditor who was recently a director of an audit client must not be assigned to the audit team for that client.
Recent Comments