MCQ--210.2 he agreed terms of the audit engagement shall be recorded in an audit engagement letter which shall include the following except (CNO--SA210.060)

b) Description of methods to be followed for obtaining audit evidence.

a) Responsibilities of the auditor

c) Responsibilities of management

d) Objective and scope of the audit of the financial statements.

MCQ--210.4 Your audit firm has been appointed as auditors of Red White Limited a manufacturing entity. The year under audit is 31 March 2018. While verifying account heads with high-risk areas like revenue and inventory, you identify certain issues for which you are not provided satisfactory replies and documents by the client. At the same time Red White Limited approaches, you to change the scope of the engagement. They give you the reason that they have misunderstood the scope of assignment earlier. What course of action would you adopt in this situation? (CNO--SA210.110)

c) Disagree to the revised terms and withdraw from the engagement where possible under applicable law and regulations and determine whether there is any obligation, either contractual or otherwise, to report the circumstance to other parties such as those charged with governance, owners or regulators.

a) Accept the revised terms of engagement, as the change is resultant of change in circumstance which affect entity’s requirements or misunderstanding concerning nature of service originally requested and consider aforesaid as reasonable basis for requesting change in the engagement.

b) Accept the revised terms of engagement and record justification of the change in the engagement letter.

d) Disagree to the revised terms of the engagement and have your terms of increased fees since the scope of the engagement has changed.

MCQ--210.5 AJ Private Ltd is in the business of telecom and have significant operations across India predominantly in Northern India. The statutory auditors of the company have been continuing for the last 3 years and have been issuing clean report. For the financial year ended 31 March 2019, the statutory auditors commenced their work in March 2019 as per discussions with the management and with a plan to complete the audit by first week of May 2019. The audit team concluded the work as per the agreed timelines and the financial statements and audit report were signed on 5 May 2019 along with the engagement letter for the financial year ended 31 March 2019.In the given situation, please advise which of the following would be correct. (CNO--SA210.110)

a) The engagement letter should have been signed before commencing the audit work.

b) The engagement letter should have been signed at least a day before signing the audit report.

c) The engagement letter should have been signed at least a day before signing the financial statements.

d) The engagement letter is optional in case of a private company and hence can be signed anytime.

MCQ--210.6 Best Manufacturers were required to pay Rs.20 Lakhs as signing amount and the balance amount was required to be paid in three instalments of Rs.25 lakhs each in the month of May, July and September 2017. The title deed for the land was to be transferred after the payment of second instalment in July 2017, so in the accounts for the year 2016-17 of the Best Manufacturers the payment of signing amount was booked as an expense. Your firm have been appointed as auditor of financial statements of Best Manufacturers Limited for the year2016-17. There is conflict between Financial Reporting Framework and Legal requirement, so what will be the duty of your firm in such case? (CNO-Unique)

(d) Discuss the matter with management and ensure disclosure of the same in notes to accounts. In the absence of same, the auditor may consider issuing modified opinion.

a) Incorporate the changes in financial statements as per the legal requirement.

b) As the title deed has not been transferred in favour of the company in the year 2016-17, there is no need to review the payment in terms of Accounting Standard or any other legal requirement.

c) Take management representation on the same.

MCQ--210.7 Preparing the financial statements in accordance with the applicable financial reporting framework is the responsibility of the management of ABC Ltd. Which of the following is correct in regard to the disclosure of such management responsibility? (CNO-UNIQUE)

(c) The auditor’s report should describe the management responsibility in a section with heading “responsibility of management for financial statements”.

(a) This is implied responsibility of management and is presumed in an audit of financial statements and therefore need not be specifically mentioned anywhere.

(b) The management may undertake to accept such responsibility through an engagement letter itself.

(d) The auditor’s report should refer to the responsibility of auditors and not that of the management as the same is obvious

MCQ--210.8 A small concern has approached CA. Ajeet Nath for audit of accounts for year 2021-22. It later on transpired that preparation of accounts of the concern was outsourced to a third party which was engaged in preparation of books of this concern on a cloud server and was also prepari ng financial statements. The discussion amongst partners regarding agreeing to audit engagement remained inconclusive. Which of the following statements is MOST APPROPRIATE regarding agreeing to audit engagement of small concern? (CNO--SA210.020)

a) The management is responsible for preparation of books and financial statements. If management is not willing to acknowledge it, audit engagement should not be accepted.

b) The third party has prepared the books and financial statements. It should be acknowledged by third party and then audit engagement should be accepted.

c) It is implied that management is responsible for preparation of books and financial statements. No express acknowledgment from management is necessary. Hence, audit engagement should be accepted.

d) The management as well as third party should acknowledge joint responsibility for preparation of books and financial statements. Only then, audit engagement should be accepted.

MCQ-220.2 PMP Ltd is an associate of PMP Inc., a company based in Kuwait. PMP Ltd is listed in India having its corporate office at Assam. The company’s operations have remained stable over the years and the management is looking to expand the operations for which the management is considering different business ventures. The company’s auditors issued clean audit report on the audit of the financial statements for the year ended 31 March 2020. For the financial year ended 31 March 21, the auditors made some changes in their audit team. While the audit partner remained the same, the field in charge has been replaced as the field in charge who was engaged in the audit of the financial statements for the year ended 31 March 2020 has left the firm. The audit team has a new person as External Quality Control Reviewer (EQCR) who has specialized knowledge of the industry in which the company is operating. EQCR has been employed with the firm for over 2.5 years and is yet to clear his CA (Chartered Accountancy) final exams. The changes were made on the basis of the consideration that the firm has enough experience of engagement with this client. The audit team commenced the work for audit of the year ended 31 March 21 after detailed planning and it was observed that EQCR had various comments on certain matters which were not accepted by the audit partner. Audit partner had better understand of the client and after assessing the comments of the EQCR did not find those relevant. The audit partner without concurrence of the EQCR finalized the audit and issued the audit report. In the given situation, please advise which one of the following is correct? (CNO-

a) The changes in the audit team were not appropriate except for the field in charge who had left the firm. EQCR should have been a member of the Institute of Chartered Accountants of India (ICAI).

b) The audit partner did the right thing by ignoring the comments of EQCR as he is the final authority to decide on any matter and take decisions. Further EQCR was junior to the audit partner.

c) The audit partner must discuss each and every comment of EQCR with the client and ensure that a proper disclosure in respect of those points should be made either in the financial statements or the audit report.

d) EQCR had sufficient and appropriate experience. He should have been given the authority to objectively evaluate various matters, before the report is issued, the significant judgments the engagement team made and the conclusions they reached in formulating the report. By ignoring the comments of the EQCR, audit partner took additional professional responsibility on himself. By considering the comments of EQCR, he could have passed the responsibility to EQCR.

MCQ--230.2 KJ Private Ltd has a business of pharmaceuticals and has an annual turnover of INR 1,500 crores. During the last few years, considering the environment in which the company operates, its profit has reduced and is still falling. Hence the management has been looking at various ways to cut the costs.AD & Associates are the statutory auditors of the company and RM & Associates are the internal auditors of the company. Initially the company did not want to appoint any internal auditors to save costs, however, at insistence of the statutory auditors, the company appointed the internal auditors. During the course of the statutory audit for the financial year ended 31 March, 2021, the statutory auditors requested for the detailed working papers of the internal auditors which the internal auditors refused. However, the statutory auditors told the management if the same are not provided then they would qualify their report. In this situation, please advise which of the following would be correct. (CNO--SA230.120)

c) The statutory auditors are not required to go to the extent of review of detailed working papers of internal auditors.

a) The statutory auditors should review the detailed working papers but they cannot qualify their report on this ground.

b) The statutory auditors may review the detailed working papers and even after that they may qualify their report.

d) The statutory auditors may review the detailed working papers of internal auditors but for that purpose they would require prior approval of the ICAI.

MCQ--230.3 You are the audit manager responsible for the audit of AB & Co. AB specializes in the manufacture of electricals goods for domestic use, such as irons, kettles, toasters, vacuum cleaners, coffee makers. The external audit of AB for the year ended 31 March 2018 is at the review and finalisation stage. The draft financial statements show a profit after tax of Rs.52.5 crores and a total assets of Rs. 190 crores. The following issue has been noted by the audit senior. The company has set up a provision for warranty costs of Rs.3.45 crores in the financial year. These costs are not deductible for tax purposes until AB pays the claims. The company has not made any adjustments for the provision in the financial statements. The tax rate is 20%. Which of the audit evidence would not be appropriate to be added in the audit working papers relating to the above provision? (CNO-Unique)

b) The provision amount seems to be material since, 6.6% of the profit after tax. Auditor need to consider qualifying the audit report.

a) Copy of the assumptions and calculations from the management of AB to arrive at the figure of Rs.3.45 crores.

c) Calculation of the deferred tax asset as per Ind AS 12 Income Tax, since there is a deductible temporary difference arising on the provision.

d) Written representation point from the management of AB confirming the amount of provision in respect of warranties.

MCQ--240.1 If, as a result of a misstatement resulting from fraud, the auditor encounters exceptional circumstances that bring into question his ability to continue performing the audit, he shall- (CNO-SA240.140)

c) Determine the professional and legal responsibilities applicable in the circumstances.

a) Withdraw from the engagement immediately.

b) Report to Audit team regarding withdrawal.

d) Ask the management for his withdrawal

MCQ--240.3 During the conduct of audit, it was found that the management has intentionally made material misstatements in the several items of the financial statements to deceive the users of the financial statements, to reduce the pressures of meeting market expectations and to increase the reputation of the company. What would be the implications on the auditor’s report if no adjustments are made to the financial statements regarding the misstatements made by the management? (CNO-Unique)

c) The auditor would issue an adverse audit opinion stating that financial statements ‘do not give a true and fair view’. The auditor should also include a ‘Basis for Adverse Opinion’ paragraph below the opinion paragraph.

a) The auditor would issue a qualified audit opinion stating that ‘except for’ these matters the financial statements are fairly presented. The auditor should also include a ‘Basis for Qualified Opinion’ paragraph below the opinion paragraph.

b) The auditor would issue an adverse audit opinion stating that ‘except for’ these matters the financial statements are fairly presented. The auditor should also include a ‘Basis for Qualified Opinion’ paragraph below the opinion paragraph.

d) The auditor would issue an adverse audit opinion stating that financial statements ‘do not give a true and fair view’. The auditor should also include a ‘Basis for Qualified Opinion’ paragraph below the opinion paragraph.

MCQ--250.1 KJA Ltd is in the business of consultancy services. The business of the company has been growing significantly and considering the nature of business, it becomes subject to various laws and regulations. Compliances have also increased because of this and management has found this very difficult to keep in pace with the changing regulatory requirements. The statutory auditors of the company, Shilpa & Associates, have considered compliance with laws and regulations as a significant risk for the purpose of their audit. Auditors had a audit planning meeting with the management and management has understood that it will be their responsibility including those charged with governance to ensure that the company’s operations are fully compliant with the provisions of various laws and regulations. This may also have an impact on the reported amounts and disclosures in the financial statements of the company. Management is planning to ensure full compliance and may implement policies and procedures, wherever required, to assist in the prevention and detection of non-compliance with laws and regulations. Please suggest among the following which one will not be a policy/ procedure to be implemented to assist in the prevention and detection of non-compliance with laws and regulations in accordance with SA 250? (CNO-Unique)

a) Maintaining a register of significant transactions of the company with comparison to particular industry and a record of complaints.

b) Monitoring legal requirements and ensuring that operating procedures are designed to meet these requirements.

c) Developing, publicizing and following a code of conduct.

d) Instituting and operating appropriate systems of internal control.

MCQ--250.2 M/s ABC & Associates are the statutory auditors of PQR Ltd. for the FY 2020-21. While conducting the audit, CA Aman, the engagement partner noticed the following: • Payments of various fines and penalties • Unusual cash payments • Payments to various government employees not supported by any document • Notices received from various regulatory authorities. • Heavy payments to legal counsels. CA Aman should consider the above as indicative of: (CNO-SA250.040)

b) Doubt of non compliance to laws by PQR Ltd.

a) Doubt on Internal Controls of PQR Ltd

c) Doubt on the accounting system of PQR Ltd.

d) Doubt on the going concern assumption of PQR Ltd.

MCQ--250.3 M/s Sati and Associates were appointed as the statutory auditors of Power King Limited for the audit of financial year 2021-22. Power King Limited has a power generating plant in Sikkim. At the time of accepting the engagement, it was decided among the engagement partner (CA Sati) and the management that since CA Sati and his team is doing the audit of a client having power plant in Sikkim for the first time, it will be the duty of the management to update the audit team regarding all the taxes and statutes applicable to units situated in Sikkim. Which of the following is correct in this regard? (CNO-SA250.020)

b) The engagement team should understand the Power King Limited business environment and should obtain knowledge about the laws and statutes applicable in this case.

a) The engagement team, being the auditor of Sikkim based power plant for the first time can always rely on the management’s information and can work accordingly.

c) The engagement team should not accept the audit of such power plant situated in Sikkim of whichhe has no prior knowledge.

d) The engagement team can very well accept the audit of Power King Limited and with respect to aspects related to Sikkim law he can give disclaimer of opinion, if required.

MCQ--250.4 Shripal Company got a show cause notice from State Pollution Control Board for the contravention of the provisions of Hazardous and waste Management Rule. As per SA 250, the auditor shall perform the audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements. As the audit team of the company became aware of information concerning an instance of non-compliance with law, what would NOT be the audit procedure to be performed? (CNO-SA250.040)

c) Monitoring legal requirement and compliance with code of conduct and ensuring that operating procedures are designed to assist in the prevention of non-compliance with law and regulation and report accordingly.

a) Understand the nature of the act and circumstances in which it has occurred and obtain further information to evaluate the possible effect on the financial statement.

b) Discuss the matter with management and if they do not provide sufficient information; and if the effect of non-compliance seems to be material, legal advice may be obtained.

d) Evaluate the implication of non-compliance in relation to other aspects of audit including risk assessment and reliability of written representation and take appropriate action

MCQ--260.1 Ms. Kee, the engagement partner of Best Hospitality Limited’s audit team did not perform the necessary communication with those charged with governance over some critical issues identified during the course of the audit. Moreover, when management identified that the engagement partner has not communicated to those charged with governance of the Best Hospitality Limited, they also chose not to communicate. Upon identification of this issue, the personnel charged with governance inquired with management and auditors as to why there was no communication of the critical matters to them. Upon such inquiry, Engagement Partner contended that it was the responsibility of Management to communicate first, then only the audit team should communicate. However, Management was of the view that they are not liable to communicate to those charged with governance. As an Engagement Quality Control Reviewer, what will be your opinion? (CNO-Unique)

a) The auditor is responsible for communicating matters required by SA 260 to those charged with governance. Also, management has a responsibility to communicate matters of governance interest to those charged with governance. Communication by the auditor does not relieve management of its responsibility.

b) SAs are not applicable to the management and hence the management was not responsible for communicating the same to those charged with governance. Also, as per SA 260, Auditor can only communicate when management has already informed those charged with governance about the matters. Auditors cannot communicate first without management’s communication.

c) Communication by management with those charged with governance of matters that the auditor is required to communicate does relieve the auditor of the responsibility to also communicate them if the management has already communicated. Hence, in the current case Management should have communicated as it was their responsibility.

d) SA 260 requires the auditor to perform procedures specifically to identify any other matters to communicate with those charged with governance which includes matters already communicated by the management of non-material nature. Hence, it was the responsibility of the Auditor to communicate.

Incs.34.2 In case of which entities under audit of Well & Associates, there was delay in assembly of Final Audit File? (CNO-SA230.060)

b) Req Ltd., TIMCO (P) Ltd. and Findey Ltd., respectively.

a) Req Ltd., TIMCO (P) Ltd., Gles Pvt. Ltd. and Findey Ltd., respectively.

c) Req Ltd. and TIMCO (P) Ltd., respectively.

d) Req Ltd., TIMCO (P) Ltd., Gles Pvt. Ltd., Findey Ltd. and DM Ltd., respectively.

MCQ--Incs.03 QRP has a subsidiary, SPS Ltd (SPS), in UK. The company has outstanding trade receivables amounting to INR 10 crores from SPS. QRP has observed that there have been some FEMA (Foreign Exchange Management Act) non-compliances on the part of QRP but the management has an action plan which they have initiated and on the basis of which management is sure that the non-compliance would be done good and there would be no penalty on the company. In case the penalty arises, the impact would be significant for QRP. The auditors of QRP have evaluated this matter by involving a regulatory matters expert and also agree with the management’s view. Do you agree with the way auditors have handled the matter related to FEMA non compliances? How would you deal with this matter? (CNO-SA250.080)

b) Auditors handled this matter appropriately. The management would need to include this matter in the notes to accounts to the financial statements.

a) Auditors didn’t handle this matter appropriately. Auditors should have informed about this matter to the RBI (Reserve Bank of India) within a period of 30 days from date this matter came to their knowledge.

c) Auditors handled this matter appropriately. But they would also need to include modification in their report because the impact of penalty, if levied, can be material.

d) Auditors could have handled this matter in a better manner by also involving a tax expert because this might result in a penalty and that may have some taxation impact for the Company."

MCQ--Incs.08 "Company got a show cause notice from State Pollution Control Board. As per SA 250, the auditor shall perform the audit procedures to help identify instances of non-compliance with other laws and regulations that may have a material effect on the financial statements. As the audit team of the company became aware of information concerning an instance of non compliance with law, what would NOT be the audit procedure to be performed? (CNO-SA250.060)

c) Monitoring legal requirement and compliance with code of conduct and ensuring that operating procedures are designed to assist in the prevention of non-compliance with law and regulation and report accordingly.

a) Understand the nature of the act and circumstances in which it has occurred and obtain further information to evaluate the possible effect on the financial statement.

b) Discuss the matter with management and if they do not provide sufficient information; and if the effect of non-compliance seems to be material, legal advice may be obtained.

d) Evaluate the implication of non-compliance in relation to other aspects of audit including risk assessment and reliability of written representation and take appropriate action."

MCQ--Incs.33.1 CA D was having a different opinion on property, plant and equipment but CA T and CA P were having same opinion. CA D wants to qualify capitalisation of post-acquisition costs incurred on machinery whereas CA T and CA P were of the opinion that the treatment done by Giant Motor is correct. Both of them contended that as they are forming a majority, CA D will have to certify common audit report which is in accordance with the opinion of CA T and CA P. Can you please guide whether CA D really needs to go with the opinion formed by CA T and CA P or not? (CNO-SA299.080)

d) CA D can altogether issue a separate audit report and reference of other audit report issued by majority auditors should be made in the emphasis of matter paragraph.

a) CA D will have to go with the opinion formed by majority auditors.

b) CA D can add a separate audit opinion paragraph in the common audit report and the same should be highlighted in emphasis of matter paragraph.

c) CA D can go with the opinion formed by the majority auditors, but CA D had a difference of opinion should be highlighted in emphasis of matter paragraph.

MCQ--Incs.34.4 For at least how many more years, Well & Associates should have retained the engagement documentation in respect of the two audit engagements as referred above? (CNO-SA230.060)

a) 3 years and 1 year, respectively.

b) 4 years and 2 years, respectively.

c) 1 year and for other audit engagement documentation was retained for requisite period.

d) 6 years and 4 years, respectively.

MCQ--Incs.36.4 • The company is planning to use the working papers of the previous auditor by demanding the audit working papers from him citing the confidentiality clause. The auditor also plans to use the same for testing the opening balances during the year. The previous year auditor having been appointed as the auditor of subsidiary; the company plans to use his work for verifying the investment balance during the year. The company has requested its previous auditor to give back its audit documentation (“working papers”) and warned the previous auditor with legal notice to submit them back to the company showing the confidentiality clause:

c) The auditor has a right over its working paper, and he is the owner of the workpapers and he may give at his discretion make available the workpapers to the company.

a) The previous auditor is bound to return the workpapers as the company has raised the confidentiality clause over the audit firm. Thus, the SA – 230 is not applicable in such scenario as the original owner itself is requesting to return the working papers.

b) The auditor has a right over its working paper, and he is the owner of the workpapers but he cannot give the workpapers to any person even at the request of the company.

d) The auditor has a right over its working papers but the owner of them is the company. He should make available the workpapers to the company at its request and SQC-1 mandates the auditor to make copies made available to its clients.

MCQ--Incs.38.1 Whether the reasons for withdrawal from the engagement by SRS & Co. can be considered to be justifiable in the light of the fact that the non-compliance was not material to the financial statements? (CNO-SA240.140)

c) Yes, in exceptional cases, the auditor may consider for such withdrawal provided that such a withdrawal is not prohibited by any law or regulation.

a) Yes, as such a withdrawal was not prohibited by any law or regulation.

b) Yes, as the auditor had obtained legal advice for the same and also such a withdrawal was not prohibited by any law or regulation.

d) Yes, as it does not matter whether non-compliance is material or not, management or those charged with governance should not refrain from taking the remedial action which the auditor has considered necessary, provided that such a withdrawal is not prohibited by any law or regulation.

CH.01P02 SA 200

Authored by Ravi Taori

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

MCQ-200.1
Don’t Pay for Fun (DPF)’ is a start-up who is trying to get funding from investors. One of the investors has expressed interest in looking at the investment proposal but has insisted that the proposal also contain DPF’s financial statements which are audited by an independent auditor. DPF engages CA Abhishek to conduct an independent audit and Abhishek issues an engagement letter for the independent audit to the owner of DPF which is duly acknowledged. DPF while finalising the financial statements is facing some difficulties so its owner requests Abhishek to provide advice as it needs to furnish the proposal to the investor fast. Since Abhishek is already engaged in the audit of the transactions, he assists DPF’s accounting officer and the financial statements are finalised. Abhishek also completes the audit and presents the audit report which is provided to the investor. Has the condition set by the investor been fulfilled? (CNO--SA200.060)

a) No, the investor had asked for independent audit.

b) Yes, as the audit report is issued after proper audit engagement letter and also examination of the books of accounts.

c) No, because CA Abhishek did not change the terms of engagement to include the advice part along with the independent audit. In order for his audit report to be independent, he should have charged separate fees for the advice.

d) Yes, DPF has hired a qualified CA to conduct the audit. Not only there is no evidence to suggest that the auditor allowed any misrepresentation, but the auditor himself advised DPF in finalising the financial statements which speaks highly of the quality of financial statements.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

MCQ-200.2
In order to form the opinion, the auditor shall conclude as to whether the auditor has obtained _________about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error.
(CNO--SA200.020)

a) reasonable assurance

b) absolute assurance

c) Limited assurance

d) None of the above

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

MCQ--200.3
he auditor’s _________ safeguards the auditor’s ability to form an audit opinion without being affected by any influences.
(CNO-SA200.060)

a) Objectivity

b) Independence

c) Confidentiality

d) Integrity

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

MCQ--200.4
Professional scepticism is defined as:
(CNO-SA200.080)

a) An attitude to avoid significant mistakes which could influence the economic decisions of users taken on the basis of the financial statements.

b) The application of relevant training, knowledge and experience in making informed decisions about the courses of action that are appropriate in the circumstances of the audit engagement.

c) An analysis of management decisions in terms of failed outcomes.

d) An attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of evidence.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

MCQ--200.5
Professional judgement is defined as:
(#Unique)

a) The application of relevant training, knowledge and experience, within the context provided by auditing, accounting and ethical standards, in making informed decisions about the courses of action that are appropriate in the circumstances of the audit engagement.

b) An attitude to avoid significant mistakes which could influence the economic decisions of users taken on the basis of the financial statements.

c) Decision making about the requirements of the accounting profession.

d) An attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of evidence.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

MCQ--200.6
The following inherent limitations in an audit affect the auditor's ability to detect material misstatements except:
(CNO-SA200.040)

a) Test and sampling.

b) Audit process permeated by judgement.

c) Poor corporate governance.

d) Audit evidence.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

MCQ--210.1
Mr. Vijay Kapoor, Chartered Accountant, has been appointed the statutory auditor by M/s. XYZ Private Limited for the audit of their financial statements for the year 2015-16. The company has mentioned in the audit terms that they will not be able to provide internal audit reports to Mr. Vijay during the course of audit. Advise, whether Mr. Vijay should accept the proposed audit engagement and on what grounds he can accept/ refuse the proposal? (i). As per SA 210 the auditor can refuse to accept the audit engagement as the management is not giving access to internal audit reports which are necessary in determining the internal controls in the company. (ii). There is no limitation on the scope of the auditor’s work, so the auditor should accept the appointment. (iii).The auditor can accept the audit engagement if the management gives representation on its responsibility. Which of the following option is correct:
(CNO-SA210.040)

a) (ii) only

b) Both (i) and (iii)

c) Both (ii) and (iii)

d) (iii) only.

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CH.01P02 SA 200

MCQ-200.2In order to form the opinion, the auditor shall conclude as to whether the auditor has obtained _________about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error.(CNO--SA200.020)

MCQ--200.3he auditor’s _________ safeguards the auditor’s ability to form an audit opinion without being affected by any influences.(CNO-SA200.060)

MCQ--200.4Professional scepticism is defined as:(CNO-SA200.080)

MCQ--200.5Professional judgement is defined as:(#Unique)

MCQ--200.6The following inherent limitations in an audit affect the auditor's ability to detect material misstatements except:(CNO-SA200.040)

MCQ--210.2he agreed terms of the audit engagement shall be recorded in an audit engagement letter which shall include the following except(CNO--SA210.060)

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MCQ-200.2
In order to form the opinion, the auditor shall conclude as to whether the auditor has obtained _________about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error.
(CNO--SA200.020)

MCQ--200.3
he auditor’s _________ safeguards the auditor’s ability to form an audit opinion without being affected by any influences.
(CNO-SA200.060)

MCQ--200.4
Professional scepticism is defined as:
(CNO-SA200.080)

MCQ--200.5
Professional judgement is defined as:
(#Unique)

MCQ--200.6
The following inherent limitations in an audit affect the auditor's ability to detect material misstatements except:
(CNO-SA200.040)

MCQ--210.2
he agreed terms of the audit engagement shall be recorded in an audit engagement letter which shall include the following except
(CNO--SA210.060)