Integrated Review in Auditing Theory

The primary purpose of an independent audit of financial statements is to

• provide a basis for assessing management’s performance.

• comply with laws and regulations.

• assure management that the financial statements are unbiased and free from material misstatements.

• provide users with an unbiased opinion about the fairness of information presented in the financial statements.

The four major steps in conducting an audit are:

a .Testing internal control

b. Audit report

c. Planning

d. Testing transactions and balances

• cadb

• abcd

• bacd

• dbac

Which of the following is not one of the express objectives of the Accountancy Act of 2004?

• Examination for registration of CPAs.

• Supervision, control, and regulation of accounting practice.

• Standardization and regulation of accounting education.

• Promulgation of accounting and auditing standards.

The primary duty to enforce the provisions of RA 9298 and its IRR rests with

• BOA

• PRC

• PRC and BOA

• SEC

In performing a financial statement audit, which of the following would an auditor least likely consider?

• Internal control.

• Quality of managements' business decisions.

• Fairness of the financial statement amounts.

• Compliance with the applicable financial reporting framework.

Statement 1: The Auditor is required to comply with majority of the PSAs relevant to the audit of an entity’s financial statements. Statement 2: A PSA is relevant to the audit when the PSA is in effect and the circumstances addressed by the PSA exists.

• Only Statement 1 is correct

• Only Statement 2 is correct

• Both statements are correct

• Both statements are incorrect

The level of assurance provided by an audit of detecting a material misstatement is referred to as:

• Absolute assurance.

• High assurance.

• Negative assurance.

• Reasonable assurance.

Which of the following statements is not a distinction between independent auditing and internal auditing?

• Independent auditors represent third party users external to the auditee entity, whereas internal auditors report directly to management.

• Although independent auditors strive for both validity and relevance of evidence, internal auditors are concerned almost exclusively with validity.

• Internal auditors are employees of the auditee, whereas independent auditors are independent contractors.

• The internal auditor's span of coverage goes beyond financial auditing to encompass operational and performance auditing.

Generally accepted auditing standards are

• Required procedures to be used to gather evidence to support financial statements.

• Policies and procedures designed to provide reasonable assurance that the CPA firm and its personnel comply with professional standards.

• Pronouncements issued by the Auditing Standards Board.

• Rules acknowledged by the accounting profession because of their universal application.

Which of the following is not a financial statement assertion relating to account balances?

• Completeness.

• Existence

• Rights and obligations.

• Valuation and competence.