Part I (True or False) Each 1.

1. Statutory law is unwritten law that has developed through court decision
2. The plaintiff is frailer of one or both parties to a contract to perform in accordance with
contract provision
3. Auditor standards indicate assurance absolute is a high, but not reasonable because,
auditor is not an insurer or guarantor of the correctness of the financial statements.
4. An error is an intentional misstatement of the financial statements, whereas fraud is
unintentional
5. Occurrence is the assertion implies that the assets and liabilities are included in the
balance sheet are at an appropriate value
6. Internal control is one event or circumstance, two a series of actions that permeate an
entity’s activities.

PART II (Multiple Choice) Each 1.5

1, Which One of the following is not the characteristics of competent evidence
A. Relevance
B. dependence of provider
C. Auditor's direct knowledge
D. Qualifications of individual providing information
2, Which one of the following is the reasons for proper Audit Plan
A. To enable the auditor to obtain sufficient competent evidence
B. To help keep audit costs reasonable
C. To avoid misunderstanding with the client
D. All of the above
3, is the risk of giving an inappropriate opinion when financial statements are materially
misstated.
A. Audit risk
B. Control risk
C. Detection risk
D. Internal Risk

4. Which one of the following is not a General Standard?

A. Proper planning and supervision.
B. Independence of mental attitude.
C. Adequate training and proficiency.
D. Due professional care.

5. Which one of the following is not a Field Work Standard?

A. Proper planning and supervision.
B. Due professional care.
C. Study the internal control structure.
D. Gather sufficient competent evidence.
6. The generally accepted auditing standard that requires “Adequate technical training and
proficiency” is normally interpreted as requiring the auditor to have
A. formal education in auditing and accounting.
B. adequate practical experience for the work being performed.
C. continuing professional education.
D. all of the above
7. If it is probable that the judgment of a reasonable person would have been changed or
influenced by the omission or misstatement of information,
A. material.
B. insignificant.
C. significant.
D. relevant
8. A measure of how willing the auditor is to accept that the financial statements may be
materially misstated after the audit is completed and an unqualified opinion has been issued is
the
A. inherent risk.
B. acceptable audit risk.
C. statistical risk.
D. financial risk.

9, A measure of the auditor’s assessment of the likelihood that there are material misstatements
in an account before considering the effectiveness of the client’s internal control is
a. control risk.
b. acceptable audit risk.
c. statistical risk.
d. inherent risk.

10, Which of the following parties is responsible for establishing an entity’s internal controls?
A. Management.
B. Auditors.
C. Management and auditors.
D. Committee of Sponsoring Organizations
11, Which one of the following is not the common characteristics of all professions?
A. Responsibility to serve the private
B. . A complex body of knowledge
C. Standard of admission to the profession
D. A need for public confidence
12, is defined as misrepresentation by a person of a material fact, known by that person to
be untrue, with the intention of misleading the other party and with the result that the other party
is injured.
A. Error
B. Fraud
C. Misrepresentation
D. All of the above
13, Which one of the following is not the Components of Internal Control
A. Control environment
B. Risk assessment
C. Information and communication
D. Control activities/procedures
E. None of the above
14, is the written contract summarizing the contractual relationship between auditor and clients.
A. Third party beneficiary
B. An engagement letter
C. Constrictive fraud
D. Gross negligence
PART THREE (DISCUSSION) 10%
1. List the types of audit evidence
2. List and explain the types of Internal Control
3. assume that auditors have assessed inherent risk for a particular assertion at 50% and
audit risk at 40%. In addition, they have performed audit procedures that they believe
have a 20% risk of failing to detect a material misstatement in the assertion. computed
The control risk for the assertion