Chapter 11: Group Audit and Using the Work of Others

The auditor with the responsibility for the audit opinion is X. What is X?

• The other auditor

• The group auditor

• The internal auditor

• The component auditor

Who is a person or firm possessing special skill, knowledge and experience in a particular field other than accounting and auditing?

• An expert

• An internal auditor

• An external auditor

• A Board of Director

Which of the following is consideration for engagement?

• For how much

• What experiences auditor have

• What employees will participate in the audit

• The qualification of each auditor conduct the audit

What are the document should be prepare when a principal auditor uses the work of another auditor?

• The impact of internal controls on the work of the other auditor.

• The audit area in which the work was performed by the other auditor.

• The professional qualifications, independence and professional competence of the other auditor.

• Procedures to obtain sufficient appropriate audit evidence that the work of the other auditor is adequate is all the consideration necessary.

Which of the following is not a situation where an auditor might use an expert?

• Actuarial valuation.

• Amortisation of patents.

• Value of contracts in progress.

• Determination of physical condition of assets.

The professional fees should be a fair reflection of the value of the professional services performed for the client based on certain condition, EXCEPT:

• Whether the company to be audited is a new or existing client.

• The degree of responsibility that performing those services entails.

• The skill and knowledge required for the type of professional services involved.

• The level of training and experience of the persons necessarily engaged in performing the professional services.

What is auditor's expert?

• An auditor who, at the request of the group engagement team, performs work on financial information related to a component for the group audit.

• An expert employed by individual companies to investigate and appraise the effectiveness of company operations for management.

• An individual or organisation possessing expertise in a field other than accounting or auditing, whose work in that field is used by the auditor to assist the auditor in obtaining sufficient appropriate audit evidence.

• An individual or organisation possessing expertise in a field other than accounting or auditing, whose work in that field is used by the internal auditors to assist in obtaining sufficient appropriate audit evidence.

The major consideration for the external auditor is to assess the competence and objectivity of the internal auditors. All of the following are the criteria for that assessment, EXCEPT:

• Scope of function

• Technical competence

• Personal behavior

• Due professional care

All of the following are the examples of internal audit functions that can be used by external auditors, EXCEPT:

• Observations of inventory counts.

• The valuations of property, plant and equipment.

• Testing of the operation effectiveness of control.

• Testing compliance with regulatory requirements.

Which situation that the auditor need specialist opinions?

• The transaction not complex.

• Lack of knowledge and abilities of the audit teams.

• Quantity and quality of audit evidence easy to obtain.

• The risk assessment of material misstatement is low.