SA 200

The auditor’s ______ safeguards the auditor’s ability to form an audit opinion without being affected by any influences.

• a)Objectivity

• b)Independence

• c)Confidentiality

• d)Integrity

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.

• a)reasonable assurance

• b)absolute assurance

• c)Limited assurance

• d)None of the above

The auditor of Delicious Sweets Limited was of the opinion that objective of audit of financial statements of a company is to provide reasonable assurance that financial statements of that company are free from misstatements. Which type of misstatements are mentioned by auditor of Delicious Sweets Limited:

• a)Simple.

• b)Material.

• c)Easy.

• d)Competent.

Professional skepticism is necessary to the critical assessment of

• a)audit documentation

• b)audit evidence.

• c)audit procedures

• d)All of the above

There are two interlinked perspectives of independence of auditors, one, independence of mind; and two,

• a)objectivity

• b)Professional competence

• c)Integrity

• d)independence in appearance

The Firm R K & Associates has an extensive understanding of Code of Ethics that underlies the fundamental principles relevant to the Auditor when conducting an Audit of Financial Statements and provides a conceptual framework for applying these principles. Which of the following does not form part of the fundamental principle?

• a)Integrity

• b)Professional Competence and due care

• c)Professional Skepticism

• d)Professional behaviour

An auditor signs a false audit report knowingly. Which of the following fundamental principles of professional ethics is violated in such a case?

• a)Objectivity

• b)Integrity

• c)Professional Competence and due care

• d)Professional behaviour

Which of the following is Incorrect:

• a)An auditor conducting an audit in accordance with SAs is responsible for obtaining absolute assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error.

• b)As described in SA 200, owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements will not be detected, even though the audit is properly planned and performed in accordance with the SAs.

• c)The risk of not detecting a material misstatement resulting from fraud is higher than the risk of not detecting one resulting from error.

• d)The risk of the auditor not detecting a material misstatement resulting from management fraud is greater than for employee fraud

An employee of Fruits and Vegetables Limited was of the opinion that auditor of a company is required to express an opinion. On which one of the following the auditor of a company is required to express an opinion:

• a)Only Balance Sheet of the Company.

• b)Financial Statements of the Company.

• c)Only Profit and Loss Account of the Company.

• d)Only Cash Flow Statement of the Company.

As per SA-200 “Overall Objectives of the Independent Auditor”, in conducting an audit of financial statements, the overall objectives of the auditor are:

• a)To obtain reasonable assurance

• b)To report on the financial statements

• c)Both (a) and (b) above

• d)none of the above