U4 - Practice Quiz Total points 7/10

The respondent's email (aaditya.manoj@commerce.christuniversity.in) was recorded on

submission of this form.

There is a proposal from XYZ Limited, who has approached you to be *1/1
their external auditors. Which of this information is relevant for assessing
their credibility?

Accounting Policies

Background of the promoters / directors

News in the social media

Market Share

Audit Plan means....

* 1/1

Timeline of the audit

Activities to execute the audit

How to verify each line item in the financial statements?

How to address critical isisues?

Statutory / External Auditor ....... rely on the work of Internal Auditor.
* 1/1

May (Optional) no conditions prescribed in the Standard

Cannot (should not)

May (Optional), subject to conditions.

Should (mandatory)

A client has migrated into an ERP environment. Which of these are *1/1
relevant?

Whether Board's approval is available to migrate to ERP.

All of the above.

Data migration

Who is the ERP vendor and implementation partner?

A client uses biometric to record the attendance of employees. Your *1/1

verification of this system is covered under......

Change Management

System Development LIfe Cycle

IT General Controls

IT Application Controls
 Materiality level is.....
* 0/1

Errors which has to be rectified

Below which sample should not be selected.

Sample size

Errors not so significant to cause mistatement to financial statements.

Correct answer

Errors not so significant to cause mistatement to financial statements.

Auditor can use the services of a specialist if.....

* 1/1

Transactions are specialised in nature like valuation, etc.,

A specialist was also an auditor before, and hence their services could be relevant.

If the holding company's auditor is using a specialist.

Management also recommends

Engagement Letter would exclude......

* 0/1

Signatory to the financial statements and audit report.

Audit Timelines

Management Responsibility clause.

Confidentiality Clause

Correct answer

Audit Timelines
 Which of the following are relevant for Audit Plan
* 1/1

Knowledge of Business of the client

All of the above.

Availability of the qualified people in the audit team

Regulatory updates

IT Auditor is useful considering

* 0/1

Auditor needs certain reports, which a specialist can generate

Auditor does not believe the client's control systems.

Law requires IT Auditor to participate

Client's IT environment and systems used are complicated.

Correct answer

Client's IT environment and systems used are complicated.

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