Which of the following are you unlikely to see in the current file of auditors’ working papers?
A. Memorandum & articles of association
B. Audit planning memorandum
C. Summary of unadjusted errors
D. Details of the work done on the inventory count
Which of the following is NOT an accepted method of selection in sampling?
A. Systematic selection
B. Pervasive selection
C. Random selection
D. Haphazard selection
Which of the following describes sampling risk?
A. The risk of the auditor carrying out a test the wrong way round
B. The risk of reliance on unsuitable audit evidence
C. The risk that the sample does not reflect the population
D. The risk of the auditor reaching the wrong conclusions from testing
At the planning stage you would NOT consider____________?
A. the timing of the audit
B. whether corrections from the inventory count have been implemented
C. last year’s audit
D. the potential use of internal audit
Which of the following should NOT be considered at the planning stage?
A. The timing of the audit
B. Analytical review
C. Last year’s written representation letter
D. Obtaining written representations
Audit risk is composed of 3 factors. Which of the following is NOT one of those factors?
A. Compliance risk
B. Detection risk
C. Control risk
D. Inherent risk
Which one of the following is NOT considered to be part of planning?
A. Background i.e. industry
B. Previous year’s audit i.e. any qualifications in the report
C. Considering the work to be done by the client staff e.g. internal audit
D. Considering whether the financial statements show a true and fair view
Which of the following is correct in relation to materiality?
A. A matter is material only if it changes the audit report
B. A matter is material if the auditor and the directors both decide that further work needs to be done in the area under question
C. A matter is material only if it affects directors’ emoluments
D. A matter is material if its omission or misstatement would reasonably influence the decisions of an addressee of the auditors’ report
How long is the auditor’s term of office?
A. Until the audit is complete
B. Until the financial statements are complete
C. Until the next AGM (Annual General Meeting)
D. Until the directors remove them
The independent auditor’s primary responsibility is to______________?
A. the directors
B. the company’s creditors (payables)
C. the company’s bank
D. the holders