Auditing MCQs

Page No. 11

According to ISA 315, which of the following is NOT an element of the control environment?


aParticipation of management

✖


b Information processing

✓


cCommitment to competence

✖


dHuman resource policies and practices

✖



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


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

✓


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

✖


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

✖


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

✖



Which of the following is normally the most reliable source of audit evidence?


aInternal audit

✖


bSuppliers’ statements

✓


cBoard minutes

✖


dAnalytical review

✖



According to ISA 500, the strength of audit evidence is determined by which two qualities?


aAppropriateness & competence

✖


bSufficiency & appropriateness

✓


cReliability & extensiveness

✖


dObjectivity & independence

✖



Which of the following are you unlikely to see in the current file of auditors’ working papers?


aMemorandum & articles of association

✓


bAudit planning memorandum

✖


cSummary of unadjusted errors

✖


dDetails of the work done on the inventory count

✖



Which of the following is NOT an accepted method of selection in sampling?


aSystematic selection

✖


bPervasive selection

✓


cRandom selection

✖


dHaphazard selection

✖


View Answer Pervasive selection

Which of the following describes sampling risk?


aThe risk of the auditor carrying out a test the wrong way round

✖


b The risk of reliance on unsuitable audit evidence

✖


cThe risk that the sample does not reflect the population

✓


d The risk of the auditor reaching the wrong conclusions from testing

✖



At the planning stage you would NOT consider____________?


a the timing of the audit

✖


bwhether corrections from the inventory count have been implemented

✓


clast year’s audit

✖


dthe potential use of internal audit

✖



Which of the following should NOT be considered at the planning stage?


aThe timing of the audit

✖


b Analytical review

✖


cLast year’s written representation letter

✖


dObtaining written representations

✓



Audit risk is composed of 3 factors. Which of the following is NOT one of those factors?


aCompliance risk

✓


bDetection risk

✖


cControl risk

✖


dInherent risk

✖


View Answer Compliance risk

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