Which of the following statements is, generally, correct about the reliability of audit evidence?

Which of the following statements is, generally, correct about the reliability of audit evidence?

Effective internal control system provides reliable audit evidence

All are correct.

Evidence obtained from outside sources routed through the client

To be reliable, evidence should conclusive rather than persuasive

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 identify possible oversights

It helps to discover material misstatements in the financial statements

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

It helps to study relationship among balance sheet accounts

Which of the following statement is true regarding an auditor’s working papers?

Which of the following statement is true regarding an auditor’s working papers?

They help the auditor to monitor the effectiveness of the audit firm’s quality control

They should be considered as the principle support for the auditor’s report

They document the level of independence maintained by the auditor

They should not contain details regarding weaknesses in the internal control system

Which of the following statement best describes the understanding with respect to ownership and custody of working papers prepared by an auditor?

Which of the following statement best describes the understanding with respect to ownership and custody of working papers prepared by an auditor?

The working papers may be obtained by third parties when they appear to be relevant to issues raised in litigation

The safe custody of working papers is the responsibility of client, if kept at his premises

The working papers must be retained by an audit firm for a period of 10 years

Successor auditors may have access to working papers of the predecessor auditors. The approval of client is not required.

Which of the following is not true about opinion on financial statements?

Which of the following is not true about opinion on financial statements?

The auditor should express an opinion on financial statements.

He is responsible for detection and prevention of frauds and errors in financial statements

His opinion is no guarantee to future viability of business

He should examine whether recognised accounting principle have been consistently

Which of the following factors would least likely affect the quantity and content of an auditor’s working papers

Which of the following factors would least likely affect the quantity and content of an auditor’s working papers

The possibility of peer review

The assessed level of control risk

The nature of auditor’s report

The content of management representation letter

Which of the following factors is most important in determining the appropriations of audit evidence?

Which of the following factors is most important in determining the appropriations of audit evidence?

The independence of the source of evidence

The quantity of audit evidence

The objectivity and integrity of the auditor

The reliability of audit evidence and its relevance in meeting the audit objective

Which of the following is correct in relation to materiality?

Which of the following is correct in relation to materiality?

A matter is material only if it affects directors’ emoluments

A matter is material if the auditor and the directors both decide that further work needs to be done in the area under question

A matter is material only if it changes the audit report

A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditors’ report

What would most effectively describe the risk of incorrect acceptance in terms of substantive audit testing?

What would most effectively describe the risk of incorrect acceptance in terms of substantive audit testing?

The auditor has rejected an item from sample which was not supported by documentary evidence

He applies random sampling on data which is inaccurate and inconsistent

The auditor concludes the balance is materially misstated when in actual fact is not

The auditor has ascertained that the balance is materially correct when in actual fact it is not

The degree of effectiveness of an internal control system depends on:

The degree of effectiveness of an internal control system depends on:

The design of the internal controls and the implementation of the control system

The design of the internal control system and the implementation of the controls

The implementation of the controls and the correctness of the accounting records

The design of the internal control system and the correctness of the accounting records

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