Audit 1 | Revision 1

What is an audit?

• Check, compare and community.

• Check, compute and communicate.

• Check, compare and communicate.

• Cheat, compute and communicate.

Suitable criteria exhibit the following characteristics:

• Relevance

• Completeness

• Both options are correct.

• Both options are incorrect.

"To determine whether recorded information properly reflects the economic events that occurred during the accounting period." This statement best describes:

• Accounting

• Auditing

• Financing

• 2 options are correct.

The following statement(s) is/are correct pertaining to principal & agent relationship:

• Agents employ directors and managers to conduct the business.

• There is rarely information asymmetry in the principal & agent relationship.

• The shareholders assume a stewardship function.

• None of the option is correct.

Concept of ______________________ is used to express the auditor’s opinion.

• materiality

• true and fair view

• professional judgement

• professional scepticism

The auditor’s opinion on the financial statements is based on the concept of obtaining _________________ assurance.

• absolute

• professional

• reasonable

• judgemental

It is the duty of an auditor of a company to form an opinion as to each of the following matters:

• whether he has obtained all the information and explanations that he required.

• whether proper accounting and other records have not been kept by the company.

• whether the returns received from branch offices of the company are not adequate.

• All options are correct.

It is ________________ responsibility to present at its annual general meeting a financial statements for the financial years

• directors'

• management's

• auditors'

• None of the option is correct.

The primary responsibility for the prevention and detection of fraud rests with both _______________ of the entity and the __________________ .

• those charged with governance (TCWG) ; management

• auditors ; management

• auditors ; those charged with governance (TCWG)

• None of the option is correct.

Misstatement may consist of the following:

• The omission of a financial statement element.

• A financial statement disclosure that is not presented in accordance with approved accounting standards.

• Both options are correct.

• Both options are incorrect.