An auditor should not accept a loan on favourable commercial terms from an audit client because of the threat to his or her independence. The threat would be a___________? A. Self-interest threat B. Self-review threat C. Advocacy threat D. Familiarity…
Which of the following is true about written representations? A. They are the best source of audit evidenceB. They should be used only when there is a lack of other substantive audit evidence C. They should be used only when…
Which of the following would you not use as a benchmark for comparison when undertaking analytical procedures? A. Other audit clients B. Previous years C. Other companies in the same industry D. Budget
What is meant by the expression ‘expectation gap’? A. The gap between how the directors of a company perform their duties and how the holders expect them to perform B. The gap between how the directors of a company perform…
Which of the following does NOT belong in the auditors’ report? A. Introductory paragraph specifying the pages to which the report relates and the accounting convention adopted B. Basis of the oionC. Involvement of any specialist D. Statement of responsibilities…
Which one of the following is part of the auditor’s function? A. Conducting the inventory countB. Obtaining and evaluating audit evidence on the financial statements C. Calculating the year-end accruals figure for inclusion in the accounts D. Providing representations to…
What sort of assurance is provided in a review engagement? A. Positive assuranceB. Negative assurance C. High level of assurance D. No assurance
For companies required to produce interim financial statements (IFI): A. one audit firm should audit the IFI and a different firm should audit the financial statements for the year as a whole. B. one accountancy firm should review the IFI…
What is meant by negative assurance? A. The auditor cannot give an oion due to lack of evidence. B. The client’s financial statements were found to be materially misstated. C. The auditor could not conduct any tests due to lack…
The auditor should examine subsequent realization of revenue such as dividends, interest,commission, etc to:_____________? A. identify cases of unrecorded revenue B. ensure proper disclosure in the balance sheet C. recompute accrued income on the data of balance sheet D. Any…