🔍Auditing MCQs
Auditing MCQs
122 MCQs61
Which of the following affects audit effectiveness?
ARisk of over reliance
BRisk of incorrect rejection
CRisk of incorrect acceptance
DBoth A and C
62
What would most appropriately describe the risk of incorrect rejection in terms of substantive testing?
AThe auditor concludes balance is materially correct when in actual fact it is not
BThe auditor concludes that the balance is materially misstated when in actual fact it not
CThe auditor has rejected an item for sample which was material
DNone of the above
63
Which of the following is not corroborative evidence?
AMinutes of meetings
BConfirmations from debtors
CInformation gathered by auditor through observation
DWorksheet supporting consolidated financial statements
64
The current file of the auditor’s working papers, generally, should include____________?
AA flowchart of the internal controls
BOrganisation charts
CA copy of financial statements
DCopies of bond and debentures
65
Which of the following statement best describes the understanding with respect to ownership and custody of working papers prepared by an auditor?
AThe working papers may be obtained by third parties when they appear to be relevant to issues raised in litigation
BThe safe custody of working papers is the responsibility of client, if kept at his premises
CThe working papers must be retained by an audit firm for a period of 10 years
DSuccessor auditors may have access to working papers of the predecessor auditors. The approval of client is not required.
66
Which of the following statement is true regarding an auditor’s working papers?
AThey document the level of independence maintained by the auditor
BThey should be considered as the principle support for the auditor’s report
CThey should not contain details regarding weaknesses in the internal control system
DThey help the auditor to monitor the effectiveness of the audit firm’s quality control
67
Which of the following factors would least likely affect the quantity and content of an auditor’s working papers
AThe assessed level of control risk
BThe possibility of peer review
CThe nature of auditor’s report
DThe content of management representation letter
68
For what minimum period should audit working papers be retained by audit firm?
AFor the time period the entity remains a client of the audit firm.
BFor a period of ten years
CFor a period auditor opines them to be useful in servicing the client
DFor the period the audit firm is in existence.
69
The auditor’s permanent working paper file should not normally, include__________?
AExtracts from client’s bank statements
BPast year’s financial statements
CAttorney’s letters
DDebt agreements
70
In determining the level of materiality for an audit, what should not be considered?
APrior year’s errors
BThe auditor’s remuneration
CAdjusted interim financial statements
DPrior year’s financial statements