auditing revision quiz

Internal audit is primarily focused on:

• a) Evaluating the financial statements
  
  
  

• b) Providing assurance on the organization’s internal controls and risk management processes

• c) Investigating fraud cases

• d) Preparing financial reports

The purpose of an interim audit is:

• a) To complete the entire audit process before year-end

• b) To assess the financial position mid-year

• c) To identify significant errors before the final audit

• d0 both b and c

Mr A has segregation of duties between his employees and has CC TV cameras, biometrics installed in his office to monitor the employees. We can say his organisations has a strong

• a. internal audit

• internal control

• c. internal culture

• d. interim audit

Vouching involves:

• a) Physical inspection of assets

• b) Examining supporting documents to verify transactions

• c) Assessing management policies

• d) Submitting audit reports to the board

How does external confirmation differ from internal confirmation?

• Internal confirmation requires third-party validation.

• External confirmation is independent validation; internal confirmation is internal validation.

• External confirmation is always more reliable than internal confirmation.

• External confirmation is conducted by internal teams.

External confirmation is used to:

• a) Confirm internal control effectiveness

• b) Obtain audit evidence from external parties regarding account balances

• c) Perform a physical count of inventory

• d) Verify the company’s internal accounting system

Which of the following are the three types of audit risk?

• Strategic risk, reputational risk, environmental risk

• Inherent risk, control risk, detection risk

• Financial risk, operational risk, compliance risk

• Market risk, credit risk, liquidity risk

What is the primary difference between verification and valuation?

• a) Verification checks the accuracy of accounts, while valuation assesses the worth of assets
  
  
  

• b) Valuation is a physical inspection, verification is making sure the assets are shown accurate value.

• c) Verification is conducted by internal auditors only, while valuation is done by external auditors

• d) Valuation only applies to liabilities

Subsequent events refer to:

• a) Events that happen after the audit report is finalized

• b) Events that happen after the financial statement date but before the audit report is issued

• c) Events that occur during the audit process

• d) None of the above

Analytical procedures are most useful in:

• a) Assessing the going concern assumption
  
  
  

• b) Testing the effectiveness of internal controls

• c) Identifying unexpected financial relationships or trends

• d) Conducting a physical inventory count