WorksheetsExternal Auditors and Professional Auditing Practise in Mala
Total questions: 10
Worksheet time: 10mins
Which of the following is not one of the three main reasons why the auditor should properly plan engagements?
To enable the auditor to obtain sufficient competent evidence.
To help keep audit costs reasonable.
To avoid misunderstandings with the client.
To enable proper on-the-job training of employees.
Which of the following is not typically included in initial audit planning?
Client acceptance/continuation decisions.
Perform preliminary analytical procedures.
Schedule engagement staff and audit specialists.
Determination of the purpose of the audit.
The purpose of an engagement letter is to
Notify the audit staff of an upcoming engagement so that personnel scheduling can be facilitated.
Document the terms of the engagement to writing in order to minimize misunderstandings.
Document the CPA firm's responsibility to external users of the audited financial statements.
All of the above.
One means of informing the client that the auditor is not responsible for the discovery of all acts of fraud is the
Client letter
Representation letter.
Engagement letter.
Responsibility letter.
Why do auditors need to obtain an understanding of a client's industry and external environment?
Accounting issues may be highly complex across companies within an industry.
Inherent risks commonly differ across companies within an industry.
Certain industries have different business risks than others.
All of the above.
An understanding of a client's external environment includes
The extent of competition within the industry.
General economic conditions.
Regulatory requirements.
All of the above.
Which of the following is the most likely first step an auditor would perform at the beginning of an initial audit engagement?
Tour the client's facilities and review the general records.
Study and evaluate the system of internal administrative control.
Prepare a rough draft of the financial statements and of the auditor's report.
Consult with and review the work of the predecessor auditor prior to discussing the engagement with the client management.
In what order should the following steps occur?
i. Assess client business risk
ii. Understand the client's business and industry
iii. Perform preliminary analytical procedures
iv. Assess risk of material misstatements
A. iv, iii, ii, i.
B. ii, iv, i, iii.
C. iv, ii, iii, i.
D. ii, i, iv, iii.
The major concern when using nonfinancial data in analytical procedures is
The accuracy of the nonfinancial data.
The presence of multiple sources of nonfinancial data.
The type of nonfinancial data.
The source of the nonfinancial data.
Early appointment of the independent auditor will enable
A proper study and evaluation of internal control to be performed.
A more thorough examination to be performed.
Sufficient competent evidential matter to be obtained.
A more efficient examination to be planned.
