Basic Auditing

What is auditing?

• The process of finding fault in the finanncial information

• The process of creating financial stataement

• The process of verifying the financial statement

• The process of creating evidence of financial statement

What is the purpose of audit?

• To satisfy the auditor

• To assist management to do financial stataement

• To provide reliable information to users

• To avoid shareholder being cheated by management

What knowledge auditor need to possess?

• Accounting knowledge

• Management knowledge

• Knowledge about law of a country

• Knowledge to gather and evaluate evidence

Which of the following is true about accounting?

• Accounting is resoonsibility of management

• Accounting is responsibility of owners of company

• Accounting is responsbiliy of auditor

• Accounting is responsibility of both accountant and audtior

In a principal agent relationship, who is principal?

• Auditor

• Owner

• Management

• Accountant

Which of the followings are internal users of financial statement?

• Managers

• Auditors

• Regulators

• Creditors

Why users use financial statament?

• To make sure profit is correct

• To make decisions

• To make everyone satisfy

• To make save the company

Which of the folowings is external user of financial statement?

• Bank

• President of company

• Shareholder

• Management

How auditor adds credibility of accounting reports?

• Assist in preparing financial stataement

• Providing proof of evidence of accounting records

• Helps management with ideas to the business

• Provides opinion on true and fair view of financial information

Which of the followings is NOT purpose of audit?

• Ensure that financial statements are bias

• Ensure financial stataement is true and fair view

• Ensure that financial statement are relevant

• Ensure that financial statement are objective