auditing mcqs

When restrictions that significantly affect the scope of the audit are imposed by the client, the auditor generally should issue which of the following opinion?

When restrictions that significantly affect the scope of the audit are imposed by the client, the auditor generally should issue which of the following

Unqualified report with ‘an emphasis of matter’ paragraph;

Disclaimer of opinion

Adverse opinion

Qualified opinion

When issuing unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the_____________?

When issuing unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the_____________?

Estimates of the total likely misstatement cannot be made

Estimate of the total likely misstatement is more than materially level

Amount of known misstatement is documented in working papers

Estimates of the total likely misstatement is less than materiality level

When applying analytical procedures, an auditor could develop independent estimate of an account balance to compare it to­___________?

When applying analytical procedures, an auditor could develop independent estimate of an account balance to compare it to­___________?

Prior year audited balance adjusted for trends in the industry

client’s unedited account balance

Prior year audited balance

client’s unedited account balance adjusted for trends in the industry

What is the primary objective of analytical procedures used in the overall review stage of an audit?

What is the primary objective of analytical procedures used in the overall review stage of an audit?

To reduce specific detection risk

To help to corroborate the conclusions drawn from individual components of financial statements

To satisfy doubts when questions arise about a client’s ability to continue

To direct attention to potential risk areas

Which of the following statements is most closely associated with analytical procedure applied at substantive stage?

Which of the following statements is most closely associated with analytical procedure applied at substantive stage?

It helps to discover material misstatements in the financial statements

It helps to study relationship among balance sheet accounts

It helps to accumulate evidence supporting the validity of a specific account balance

It helps to identify possible oversights

What is meant by the expression ‘expectation gap’?

What is meant by the expression ‘expectation gap’?

The gap between the public perception of the role of company auditors and their statutory role and responsibilities

The gap between the auditors’ own perception of their duties and how they are set out in the Companies Act

The gap between how the directors of a company perform their duties and how the general public expects them to perform

The gap between how the directors of a company perform their duties and how the shareholders expect them to perform

The basic assumption underlying the use of analytical procedures is:____________?

The basic assumption underlying the use of analytical procedures is:____________?

None of the above.

It helps the auditor to study relationship among elements of financial information

Analytical procedures will not be able to detect unusual relationships

Relationship among data exist and continue in the absence of known condition to the contrary

The auditor should examine subsequent realization of revenue such as dividends, interest,commission, etc to:­_____________?

The auditor should examine subsequent realization of revenue such as dividends, interest,commission, etc to:­_____________?

identify cases of unrecorded revenue

ensure proper disclosure in the balance sheet

Any of these

recompute accrued income on the data of balance sheet

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