WorksheetsChapter 1
Total questions: 46
Worksheet time: 24mins
Auditing is a process in which independent and
competent auditors collect and evaluate of evidence
about audited information to determine and report on
the degree of correspondence between the information
and established criteria.
True
False
Who implement the auditing?
independent auditors
state auditors
internal auditors
All of above answers
How many kinds of auditors in the market economy?
3 kinds: financial statement audit, compliance audit, operational audit
2 kinds: financial statement audit, compliance audit
1 kind: operational audit
2 kinds: compliance audit, operational audit
What is the kind of audited information?
- The first, financial information.
- The second, operational information.
- The third, compliant information.
- The first, financial information.
- The second, operational information.
financial information
The process of auditing
implementing, completing and planning
implementing, planning and completing
planning, implementing and completing
independent and competent auditors:
Independence in fact: maintains an unbiased attitude, follows the auditing
standards and obeys the law.
Independence in appearance: shouldn’t be influenced by the client‘s interest
and close relationships.
Competence: qualification, skills, ethics and factors needed to effectively
manage and confirm the correctness of a company’s accounting procedures.
All of above answers
What are the causes of information risk?
The big gap between the users and supplier of information and
adjustment of information which may benefit the supplier.
The great volume of information
The increased complexity of information and economic activities.
Incorrect treatment of information.
All of above answers
What is the best way to reduce information risk?
User verifies information by himself/herself.
User shares information risk with management or supplier
of information
User uses audited financial FSs provided by independent auditors.
Auditing has 2 main functions as follows:
examination and confirmation (or verification function) (chức năng xác minh)
consultancy functions (chức năng tư vấn)
All of above answers
What is the difference between modern and traditional audit functions?
- Traditional audit function: Confirmation & assurance (in the past and
present)
- Modern audit function: Recommendation & consultation (in the future).
- Traditional audit function: Recommendation & consultation (in the future).
- Modern audit function: Confirmation & assurance (in the past and
present)
There is no difference
- Traditional audit function: Recommendation
- Modern audit function: Confirmation
Type of Assurance Services:
1. Audit
2. Internal Control over Financial Reporting
3. Review
4. Information Technology
5. Other
1. Audit
2. Internal Control over Financial Reporting
3. Review
4. Information Technology
1. Internal Control over Financial Reporting
2. Review
3. Information Technology
Which ways to classify of auditing:
Based on the purpose of auditing: performance audit, compliance
audit, and financial statement audit
Based on the form of auditing organization: state audit, internal
audit, and independent audit
Based on the auditing party’s relationship: internal audit and
external audit
Based on the legal liability of audited object: compulsory and
voluntary audit.
Based on auditing time: pre-audit and post-audit.
Based on the purpose of auditing:
performance audit
compliance audit
financial statement audit
All of above answers
Based on the form of auditing organization:
state audit
internal audit
external audit
All of the above answers
Which answer is correct about performance audit?
Performance audit = Operational audit = Management audit
Performance audit is conducted to evaluate the economy, effectiveness and efficiency of the organization's operations (3E).
Purpose: to evaluate the economy, effectiveness, and efficiency of the organization's operations and consulting.
Subject matters: subject of performance audit can be various and diversified
Function: consultation
Report sent to: managers to inform them about audited results and recommend to improve business performance.
Which one is correct about compliance audit?
Purpose: to consider and evaluate the audited firms comply the rules and regulation set by some higher authorities and make recommendation.
Subject matters: the fact of compliance the regulations and law of competent state agencies and audited business.
Standards: the regulations and law of competent state agencies and audited business.
Function: Confirmation & recommendation
Report sent to: users as the business or business managers with audited results, not to serve general users.
Which is correct about financial statement audit?
Purpose: to determine whether the overall the information being verified in the financial statements are stated in accordance with specified criteria.
Subject matters: FSs (such as: balance sheet, income statement, cash flow
statement and notes) or interpretation of financial statements of businesses.
Standards: accounting standards, law regulations and other related rules.
Function: confirmation & consultation
Report sent to: audit result will be reported to the entity who hires the auditing firm.
The function and role of independent audit organization
The independent audit organization plays role as an independent party (third party) presenting examination and confirmation function, and gives an opinion about the true and fair view of audited information.
The user information has reliance basis to give his decision suitably.
The result of audit also helps audited entity to see themselves
objectively
the audit consultation in the management letter will help top of management to give the necessary adjustment in business as well as management task
All of the above answers
Which is correct about state audit?
State Audit organization plays a role as a management tool of the State, especially in the expenditure State budget.
It helps to improve and strengthen the management of State agencies, or organizations in compliance with law and other regulations such as the business law, the added value tax law, the environment protect law, and accounting law...
Audit State organizations can perform many kinds of audits such as financial statement audit, performance audit and compliance audit.
All of above answers
Which is correct about internal audit?
Internal audit organization plays role as manageable tool of top of management in the enterprise.
It serves for governance activity of firm itself, particularly the elements of assurance, risk, and control.
Internal audit organization may carry out performance audit, compliance audit, and financial statement audit.
All of the above answers
The specific objectives of internal auditing include:
Assisting Board of Management(BOM) and Executives in performing supervisory function for the process of information report
Evaluating the effectiveness of risk management and internal control systems, proposing recommendation with BOM and Executives to
improve entity's operations
Assessing compliance with related laws and regulations to protect the
existence and reputation of the entity
Helping to lift the entity's position by improving risk management and
internal control systems in enterprise.
All of the above answers
What is assurance? (dịch vụ đảm bảo)
An assurance engagement is one in which a practitioner aims to obtain sufficient appropriate evidence to express a conclusion designed to enhance the degree of confidence of the intended users other than the responsible party about the outcome of the measurement or evaluation of an underlying subject matter against criteria.
True
False
5 key Key elements of assurance engagement
Mối quan hệ 3 bên:
- Practitioner (professional, accountant): người cung cấp dịch vụ đảm bảo
- Intended users: sử dụng để making economic decisions . - The responsible party: người cung cấp subject matter phục vụ practitioners.
Subject matter
Suitable criteria
Sufficient appropriate evidence to support the assurance opinion
A written report in appropriate form
The level of assurance provided by an external audit is absolute.
Is this statement true or false?
True
False
Independent audit firms only conduct audit financial statements.
Is this statement true or false?
True
False
Which of the following internal audit assignments is described below?
The examination of the economy, efficiency, and effectiveness of activities and processes
Financial audit
Value for money audit
Regulatory compliance audit
IT audit
Which two of the following characteristics apply to internal audit?
(1) The purpose is to improve the company's operations.
(2) Reports to shareholders on whether the financial statements give a true and fair view of affairs.
(3) Auditors may be employees of the company.
(4) Evidence is collected in accordance with relevant ISAs.
(1) and (3)
(2) and (4)
(1) and (4)
(2) and (3)
The level of assurance provided by an assurance engagement will depend on the type of engagement. Which of the following type of engagemeent will give the level of reasonable assurance?
Review of financial information
Report on profit and cashflow forcast
Internal audit reviews
Statutory audit
Which of the following is TRUE regarding audit?
An audit gives the reader reasonable assurance of the truth and fairness of
the financial statements
Audit report guarantees that the financial statements are correct
Audit gives an absolute assurance that the accounts are free from material
misstatement
Independence referred to as the cornerstone of the auditing profession.
True
False
The sole responsibility of management with regard to financial reporting involves preparing and presenting financial statements in accordance with the applicable financial reporting framework.
True
False
The independent audit firm only conducts financial statement audits.
True
False
Companies with effective corporate governance are more risky to audit.
True
False
Directors are stewards (quản lý) of the investment made by shareholders in a company.
True
False
The format of the internal audit report is governed by statue (đạo luật, chế độ)
True
False
The level of assurance provided by an external audit is absolute.
True
False
Regarding auditor’s duty of confidentiality, auditors must never, under any circumstances, disclosures any matters of which they become aware during the course of the audit to third parties, without the permission of the client.
True
False
It is not the auditor’s responsibility to ensure that the entity complies with relevant laws and regulations.
True
False
Which of the following factors does not create a demand for external audit services?
Potential bias by management in providing information
Requirement of the regulation
Complexity of the accounting processing systems
Remoteness between a user and the organisation
Which of the following parties are involved in preparing and auditing financial statements?
Management
Audit committee
Internal audit function
External auditor
All of the above
Which of the following are the responsibilities of the external auditor in auditing financial statements?
Maintaining internal controls and preparing financial reports
Providing internal assurance on internal control and financial reports
Providing internal oversight of the reporting process
All of the above
None of the above
Who normally appoints the external auditors of a company?
a. Directors
a. Shareholders
a. Audit committee
a. Senior management
1. Which of the following is the most appropriate definition of the external audit?
a. The external audit is an exercise carried out by auditors in order to give an opinion on whether the financial statements of a company are materially misstated.
a. The external audit is an exercise carried out in order to give an opinion on the effectiveness of a company’s internal control system.
a. The external audit is performed by management to identify areas of deficiency within a company and to make recommendations to mitigate those deficiencies.
a. The external audit provides negative assurance on the truth and fairness of a company’s financial statements.
1. Who is ultimately responsible for a company’s system of internal controls?
a. External auditors
a. Board of directors
a. Internal auditors
a. Audit committee
Which two of the following characteristics apply to internal audit?
(1) The purpose is to improve the company’s operations.
(2) Reports to shareholders on whether the financial statements give a true and fair view of affairs.
(3) Auditors may be employees of the company.
(4) Evidence is collected in accordance with relevant ISAs.
a. (1) and (3)
a. (2) and (4)
a. (1) and (4)
a. (2) and (3)
1. Which of the following is a limitation of the internal audit function?
a. The internal audit report is not circulated to the members.
a. Internal audit assignments are designed to meet the needs of the business.
a. Internal auditors may be employees of the company.
a. Internal auditors may report to an audit committee.
