Audit and Assurance Quiz

“Based on our review, nothing has come to our attention that causes us to believe that the

accompanying financial statements do not present fairly, in all material respects … in accordance

with International Financial Reporting Standards.”

Which of the following BEST describes the type of assurance provided by this statement?

• Positive assurance expressed negatively

• Negative assurance expressed positively

• High level of assurance expressed negatively

• Limited level of assurance expressed negatively

Which of the following best describes professional scepticism?

• To disbelieve management

• To not believe anything that management asserts, without obtaining supporting evidence

• To apply a questioning mind to information and evidence

• To be prudent and always assume the worst outcome in the case of uncertainty

Who is ultimately responsible for ensuring that the annual financial statements of a listed company are prepared in accordance with IFRS and relevant legislation?

• The auditor

• The board of directors

• The company secretary

• The listing exchange

What is the objective of an audit of financial statements of a company?

• To protect the interests of minority shareholders

• To detect fraud and other irregularities

• To assess the effectiveness of the company’s performance

• To provide assurance on credibility of the financial statements

Which of the following statements, relating to International Standards on Auditing (ISAs) are correct?

• ISAs are issued by the International Accounting Standards Board (IASB) and provide guidance on the performance and conduct of an audit

• In the event that ISAs differ from local legislation in a specific country, auditors must comply with the requirements of the ISAs

• Both incorrect

Who approves the appointment of a company’s auditor?

• The statutory authorities

• The directors

• The shareholders

• The company’s bank

The International Auditing and Assurance Standards Board (IAASB) is a standard-setting board of which of the following?

• Organisation for Economic Co-operation and Development

• International Financial Reporting Standards Foundation

• International Federation of Accountants

• The World Bank

Which of the following is generally accepted as a right of an auditor?

• To have access to the company’s books, accounts and records

• To require from company officials any information and explanations on any matter whatsoever

• To report to any legal authority any matter the auditor considers that authority needs to know

• To attend any board or committee meeting

Which of the following statements relating to International Standards on Auditing (ISAs) and professional auditors is true?

• All ISAs must be applied during the course of the audit

• ISAs override local regulations

• ISAs are rules-based and all rules must be applied

• In most jurisdictions, only a statutory auditor is allowed to carry out audits of companies

What is the main purpose of providing assurance services?

• To guarantee that financial statements are 100% accurate

• To enhance the credibility of the information being assessed

• To improve the internal control processes of the company

• To reduce the overall costs of the business