WorksheetsLS 1.10 - Fundamentals of Auditing & Assurances
Total questions: 66
Worksheet time: 13mins
The word "audit" derives from the Latin word “ (a) ”
" To obtain (a) about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion whether the finanial statements are prepared, in all material respects, in accordance with applicable financial reporting framework. "
" To obtain reasonable assurance about whether the financial statements as a whole are (a) , whether due to fraud or error, thereby enabling the auditor to express an opinion whether the finanial statements are prepared, in all material respects, in accordance with applicable financial reporting framework. "
" To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to (a) , thereby enabling the auditor to express an opinion whether the finanial statements are prepared, in all material respects, in accordance with applicable financial reporting framework. "
" To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion whether the finanial statements are prepared, in (a) , in accordance with applicable financial reporting framework. "
" To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion whether the finanial statements are prepared, in all material respects, in accordance with applicable (a) . "
A systematic process of objectively obtaining evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested parties.
Attestation services
Auditing
Assurance services
Review
Auditing is systematic process of objectively obtaining evidence regarding assertions about (a) to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to interested parties.
Auditing is systematic process of objectively obtaining evidence regarding assertions about economic actions and events to ascertain the (a) between the assertions and established criteria and communicating the results to interested parties.
Auditing is systematic process of objectively obtaining evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the (a) and communicating the results to interested parties.
Auditing is systematic process of objectively obtaining evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between the assertions and established criteria and communicating the results to (a) .
Structured, framework, a step-by-step procedure
(a)
A competent and independent person is partial and objective.
T
F
Communicating the results, referred to as (a) .
Auditing is a structured process that involves the application of analytical skill, professional judgment, and (a) .
An attitude that includes a questioning mind and a critical assessment of audit evidence.
Professional jugment
Professional skepticism
Professional behavior
Professional evaluation
3 Major Types of Audit
Determines whether the financial statements are fairly presented in accordance with the applicable financial reporting framework.
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit
Study of a specific unit of an organization to measure its performance. Assesses performance, identifies areas for improvement, and makes recommendations.
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit
Determines whether the organization has adhered to specific procedures, rules, or regulations.
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit
Examination conducted by COA and/or BIR
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit - ASSERTIONS MADE
The financial statements are fairly presented.
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit - ASSERTIONS MADE
The organization has complied with laws, regulations, or contracts.
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit - ASSERTIONS MADE
The organization's activities are conducted effectively and efficiently.
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit - ESTABLISHED CRITERIA
Financial reporting frameworks such as PFRS.
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit - ESTABLISHED CRITERIA
Laws, rules, regulations, and/or contracts
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit - ESTABLISHED CRITERIA
Board of directors' objectives
Financial Audit
Compliance Audit
Operational Audit
3 Major Types of Audit - ESTABLISHED CRITERIA
Board of directors' objectives
Financial Audit
Compliance Audit
Operational Audit
CPA's who offer their professional services to different clients on a contractual basis.
External Auditor
Internal Auditor
Government Auditor
Forensic Auditor
Also known as independent auditors.
External Auditor
Internal Auditor
Government Auditor
Forensic Auditor
Investigate and appraise the effectiveness and efficiency of operations and internal controls.
External Auditor
Internal Auditor
Government Auditor
Forensic Auditor
More likely to be involved in operational auditing.
External Auditor
Internal Auditor
Government Auditor
Forensic Auditor
Must be independent of the line functions and may report directly to the audit committee or board of directors.
External Auditor
Internal Auditor
Government Auditor
Forensic Auditor
Employed by corporations, government agencies, public accounting firms, and specialized consulting and investigative services firms.
External Auditor
Internal Auditor
Government Auditor
Forensic Auditor
Specifically trained in detectives, investigating, and deterring fraud and white-collar crime.
External Auditor
Internal Auditor
Government Auditor
Forensic Auditor
Determines whether entities comply with government laws and regulations.
External Auditor
Internal Auditor
Government Auditor
Forensic Auditor
Evaluate the operational efficiency and effectiveness of various government programs.
COA Auditors
BIR Examiners
Regulatory Auditors
Concerned with government agencies and other entities that use public funds.
COA Auditors
BIR Examiners
Regulatory Auditors
Affect individuals as well as businesses. Must have considerable tax knowledge and auditing skills to conduct an effective audit.
COA Auditors
BIR Examiners
Regulatory Auditors
A form of _____ auditing, BIR audits determine whether the taxpayers have complied with tax laws.
Forensic
Compliance
Operational
Internal
Other auditors include SEC, BSP, and other government agency examiners who check on the solvency and compliance of the various institutions and business firms with appropriate laws and regulations.
COA Auditors
BIR Examiners
Regulatory Auditors
Deter fraudulent activities.
Internal Audit
Compliance Audit
Operational Audit
Forensic Audit
Sometimes referred to as performance audit or management audit.
Internal Audit
Compliance Audit
Operational Audit
Forensic Audit
Future-oriented
Internal Audit
Compliance Audit
Operational Audit
Forensic Audit
Adds value and improves an organizations operations.
Internal Audit
Compliance Audit
Operational Audit
Forensic Audit
General Requirements when Auditing Financial Statements:
* Comply with the relevant (a) including independence in the conduct of an audit in accordance with the Philippine Standards on Auditing.
* Apply professional judgment in planning and performing audit.
* Obtain sufficient appropriate evidence to reduce the risk to acccetably low level.
* Perform audit with attitude of professional skepticism.
General Requirements when Auditing Financial Statements:
* Comply with the relevant ethical requirements including independence in the conduct of an audit in accordance with the Philippine Standards on Auditing.
* Apply (a) in planning and performing audit.
* Obtain sufficient appropriate evidence to reduce the risk to acccetably low level.
* Perform audit with attitude of professional skepticism.
General Requirements when Auditing Financial Statements:
* Comply with the relevant ethical requirements including independence in the conduct of an audit in accordance with the Philippine Standards on Auditing.
* Apply professional judgment in planning and performing audit.
* Obtain (a) evidence to reduce the risk to acccetably low level.
* Perform audit with attitude of professional skepticism.
General Requirements when Auditing Financial Statements:
* Comply with the relevant ethical requirements including independence in the conduct of an audit in accordance with the Philippine Standards on Auditing.
* Apply professional judgment in planning and performing audit.
* Obtain sufficient appropriate evidence to reduce the risk to acccetably low level.
* Perform audit with attitude of (a) .
Independence is necessary to avoid conflict of interest between management and users of the financial statements.
T
F
Assurance services enhance the degree of confidence in the information.
T
F
Information _____ means that the manager generally has more information about the "true" financial position than does the absentee owner.
divide
symmetry
asymmetry
gap
Causes of Information Risk:
(a) of information, biases and motives of the provider, voluminous data, complex exchange transactions.
Causes of Information Risk:
Remoteness of information, (a) and motives of the provider, voluminous data, complex exchange transactions.
Causes of Information Risk:
Remoteness of information, biases and motives of the provider, (a) data, complex exchange transactions.
Causes of Information Risk:
Remoteness of information, biases and motives of the provider, voluminous data, (a) exchange transactions.
Audit function operates on the assumption that all financial data are (a) .
Effective internal control reduces the possibility of (a) of the financial statements.
What was held true in the past will continue to hold (a) in the future in the absence of known conditions to the contrary.
An audit benefits the (a) .
Consistent applicable of applicable financial reporting framework such as the PFRS results in (a) presentation of financial statements.
The (a) is the sequence of different activities involved in an audit.
The emphasis and order of certain activities in an audit process will not vary.
T
F
Audit risk is the risk that the auditor mistakently give a "clean" or unqualified opinion on financial statements that are materially misstated.
T
F
Audit risk is the risk that the auditor mistakently give a " (a) " or unqualified opinion on financial statements that are materially misstated.
Audit risk is the risk that the auditor mistakently give a "clean" or (a) opinion on financial statements that are materially misstated.
Reasonable assurance means a high but not absolute level of assurance.
T
F
