lOMoARcPSD|9247550

Auditing Theory Reviewer 4

Bachelor of Science in Accountancy (University of Mindanao)

StuDocu is not sponsored or endorsed by any college or university

Downloaded by Ryan Pedro (RyanPedro123456789p@gmail.com)
 lOMoARcPSD|9247550

1. A procedure that would least likely be used by an auditor in performing tests of

control is

a. Recalculation
b. Observation
c. Inspection
d. Re-performance

2. A qualified opinion, an adverse opinion, or a disclaimer of opinion are known as

a. Modified opinions
b. Explanatory opinions
c. Standardized statements
d. Unmodified opinions

3. Before relying on the system of internal control, the auditor obtains a reasonable
degree of assurance that the internal control procedures are in use and operating as
planned. The auditor obtains this assurance by performing

a. Compliance Tests/ Tests of controls

b. Transaction tests
c. Substantive tests
d. Tests of trends and ratios

4. Completeness assertion about classes of transaction and events means

a. Transactions and events have been recorded in the correct accounting period
b. All assets, liabilities and equity interests that should have been recorded have
been recorded
c. Transactions and events that have been recorded have occurred and pertain to
the entity
d. All transactions and events that should have been recorded have been
recorded

Downloaded by Ryan Pedro (RyanPedro123456789p@gmail.com)

 lOMoARcPSD|9247550

5. Engagement letters are required for

a. All engagements except the preparation of ITR

b. Assurance engagements only
c. All engagements
d. Audit engagements only

6. Given that an audit in accordance with generally accepted accounting standards is

influenced by the possibility of material errors and fraud, the auditor should conduct
the audit with an attitude of

a. Professional responsiveness
b. Conservative advocacy
c. Professional scepticism
d. Objective judgement

7. In assessing control risk, an auditor ordinarily selects from a variety of techniques,

including

a. Re-performance and observation

b. Inquiry and analytical procedures
c. Inspection and verification
d. Comparison and confirmation

8. Materiality is least important to an external auditor in determining the

a. Effect on independence of his direct financial interest in the client

b. Specific transactions which should require a detailed review
c. Extent of his audit of certain accounts
d. Effects of exceptions upon his opinion in the audit report

9. Professional scepticism requires that an auditor assume that management is

Downloaded by Ryan Pedro (RyanPedro123456789p@gmail.com)

 lOMoARcPSD|9247550

a. Offering reasonable assurance of honesty

b. Dishonest until completion of test
c. Honest, in the absence of fraud risk factors
d. Neither honest nor dishonest

10. Statement I. Only the amount of misstatements need to be considered in assessing

materiality. Statement II. Both the amount and nature of misstatements need to be
considered in assessing materiality.

a. False, False
b. True, True
c. False, True
d. True, False

Downloaded by Ryan Pedro (RyanPedro123456789p@gmail.com)