Exercise PSA 200

What is the overall objective of the independent auditor according to PSA 200?

• To ensure financial statements are free from all errors

• To provide a detailed report on internal controls

• To prepare the financial statements for the management

• To obtain reasonable assurance about whether the financial statements are free from material misstatement

What does PSA stand for?

• Philippine Standards on Auditing

• Private Standards on Auditing

• Public Standards on Auditing

• Professional Standards on Auditing

When is PSA 200 effective for audits of financial statements?

• For periods beginning on or after December 15, 2010

• For periods beginning on or after December 15, 2015

• For periods beginning on or after December 15, 2009

• For periods beginning on or after December 15, 2005

What is the definition of 'audit evidence' according to PSA 200?

• Information that is not relevant to the audit

• Any document related to the audit process

• Only the financial statements provided by management

• Information used by the auditor to form an opinion

What is the auditor required to maintain throughout the audit?

• Independence from management

• A detailed checklist

• A positive attitude

• Professional skepticism

What does the term 'materiality' refer to in the context of an audit?

• The importance of financial statement items that could influence users' decisions

• The size of the audit team

• The cost of conducting the audit

• The time taken to complete the audit

Who is responsible for the preparation and presentation of the financial statements?

• The regulatory body

• The external stakeholders

• Management and those charged with governance

• The auditor

What is the risk of material misstatement?

• The risk that the auditor will not detect fraud

• The risk that the financial statements are materially misstated prior to audit

• The risk that the auditor will provide an unqualified opinion

• The risk that management will not cooperate

What is the role of those charged with governance?

• To oversee the strategic direction and accountability of the entity

• To conduct the audit

• To prepare the financial statements

• To approve the auditor's report

What is the auditor's opinion based on?

• The audit evidence obtained

• The financial statements alone

• The auditor's personal beliefs

• The management's assertions