QUIZ- AUD589 OCT 2023

Auditors do not provide which of the following?

• Absolute assurance on the financial statements including assuming responsibility for them

• Assurance on financial statements

• Assurance on the effectiveness of internal controls over financial reporting

• Assurance on corporate sustainability reports

The possibility that a business may not be able to repay a bank loan because of an economic downturn is referred to as

• Business risk

• Materiality risk

• Interest rate risk

• Information risk

An auditor need not abide by a particular auditing standard if the auditor believes that

• The issue in question is immaterial in amount

• More expertise is needed to fulfill the requirement

• Fraud is involved

• The requirement of the standard has not been addressed by the Audit Oversight Board (AOB)

When auditing accounting data, auditors focus on

• Determining whether recorded information properly reflects the economic events that occurred during the accounting period

• Determining if taxable income has been calculated correctly

• Determining if fraud has occurred

• Analyzing the financial information to be sure that it complies with government requirements

In the auditing process,

• The types and amounts of evidence remain constant from audit to audit

• The criteria for evaluating information will not vary depending on the information being audited

• Records are gathered by the auditor to determine whether the audited information is stated in accordance with SEC standards

• The audit report communicates the auditor's findings to users

______ means that a person acts according to conscience, regardless of the situation.

• Respect

• Fairness

• Caring

• Integrity

The underlying reason for a code of professional conduct for any profession is

• It is required by federal legislation

• It allows licensing agencies to have a yardstick to measure deficient behavior

• It provides a safeguard to keep unscrupulous people out

• The need for public confidence in the quality of service of the profession

Which of the following statements is true when the Chartered Accountant Firm has been engaged to perform an audit of financial statements?

• The Chartered Accountant Firm is engaged and paid by the client, but the primary beneficiaries of the audit are those who rely on the financial statements

• The Chartered Accountant Firm has primary responsibility to the Malaysian Accounting Standard Board (MASB)

• Should a situation arise where there is no convincing authoritative standard available and there is a choice of actions which could impact a client's financial statements, the Chartered Accountant Firm is free to endorse the choice which is in the investors' interests

• The Chartered Accountant Firm is engaged and paid by the client; therefore, the firm has primary responsibility to be an advocate for the client

One objective of an operational audit is to

• Determine whether the financial statements fairly present the entity's operations

• Report on the entity's relative success in attaining profit maximization

• Make recommendations for improving performance

• Determine if the auditee is in compliance with Generally Accepted Accounting Principles (GAAP)

An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n)

• Production audit

• Audit of financial statements

• Operational audit

• Compliance audit