Audit and Assurance Quiz

What is the main goal of an external audit?

• To prepare the financial statements

• To conduct internal audits

• To manage the company's assets

• To express an opinion on the financial statements

Nothing has come to our attention that causes us to believe that the financial statements do not present fairly, in all material respects. Which of the following BEST describes the type of assurance provided by this statement?

• Negative assurance expressed positively

• Positive assurance expressed negatively

• High level of assurance expressed negatively

• Limited level of assurance expressed negatively

What level of assurance would you expect when auditing financial statements?

• Limited

• Zero

• Absolute

• Reasonable

Which of the following best describes professional scepticism?

• To apply a questioning mind to information and evidence!

• To be prudent and assume the worst outcome in uncertainty!

• To disbelieve management's wild stories!

• To not believe anything management asserts without supporting evidence!

What level of assurance do you typically get when reviewing financial statements?

• Reasonable

• Absolute

• Limited

• Zero

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

• The listing exchange

• The auditor

• The company secretary

• The board of directors

When conducting an audit, which is a key principle of independence?

• Accepting gifts from the company

• Being involved in the company's operations

• Being free from conflicts of interest

• Having a close relationship with management

Which of the following best describes the concept of materiality in auditing?

• Information that is irrelevant to the financial statements

• All information, regardless of its impact

• Only quantitative data

• Information that could influence the decision of users

Which of the following statements about 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, auditors must comply with ISAs

• Neither

• Both

Who approves the appointment of a company’s auditor?

• The directors

• The statutory authorities

• The shareholders

• The company’s bank