CA Inter Auditing and Assurance Quiz ( ICAI MCQ 1-20 )

1. ____________ along with other disciplines such as accounting and law, equips you with all the knowledge that is required to enter into auditing as a profession.

Auditing

Taxation

Finance

Law

2. No business or institution can effectively carry on its activities without the help of proper ____________:

Audit

Record and accounts

neither (a) nor (b)

both (a) and (b)

3. As per SA-200 “Overall Objectives of the Independent Auditor”, in conducting an audit of financial statements, the overall objectives of the auditor are:

To obtain reasonable assurance

To report on the financial statements

Both (a) and (b) above

to obtain absolute assurance.

4. (IESBA Code) related to an audit of financial statements establishes which of the following as the fundamental principle of professional ethics relevant to

the auditor when professional judgement.

professional skepticism.

professional intelligence.

Professional competence and due care.

5. The auditor’s _________ safeguards the auditor’s ability to form an audit opinion without being affected by any influences.

Objectivity

independence

Confidentiality

Integrity

6. Which of the following is the responsibility of the auditor:

Preparation and presentation of the financial accordance with applicable financial reporting

Design, implementation and maintenance of internal controls

Express an opinion on the Financial Statements

To obtain limited assurance.

7. An employee of Fruits and Vegetables Limited was of the opinion that auditor of a company is required to express an opinion. On which one of the following the auditor of a company is required to express an opinion:

Only Balance Sheet of the Company.

Financial Statements of the Company.

Only Profit and Loss Account of the Company.

Only Cash Flow Statement of the Company.

8. The auditor of Delicious Sweets Limited was of the opinion that objective of audit of financial statements of a company is to provide reasonable assurance that financial statements of that company are free from misstatements. Which type of misstatements are mentioned by auditor of Delicious Sweets Limited:

Simple.

Material.

Easy.

Competent.

9. If the auditor concludes that there is reasonable justification to change the engagement and if the audit work performed complied with the SAs applicable to the changed engagement, the report issued would be appropriate for the revised terms of engagement. In order to avoid confusion, the report would not include reference to:

the original engagement; or any procedures that may have been performed in the original engagement.

the original engagement ;

any procedures that may have been performed in the original engagement

the original engagement and any procedures that may have been performed in the original engagement.

10. If the auditor is unable to agree to a change of the terms of the audit engagement and is not permitted by management to continue the original audit engagement, the auditor shall:

Withdraw from the audit engagement where possible under applicable law or regulation;

Determine whether there is any obligation, either contractual or otherwise, to report the circumstances to other parties, such as those charged with governance, owners or regulators.

Withdraw from the audit engagement where possible under applicable law or regulation and determine whether there is any obligation, either contractual or otherwise, to report the circumstances to other parties, such as those charged with governance, owners or regulators.

Withdraw from the audit engagement where possible under applicable law or regulation or determine whether there is any obligation, either contractual or otherwise, to report the circumstances to other parties, such as those charged with governance, owners or regulators.

11. A request from the client for the auditor to change the engagement may result from- 1. a change in circumstances affecting the need for the service, 2. a misunderstanding as to the nature of an audit or related service originally requested a restriction on the scope of the engagement, 3. whether imposed by management or caused by circumstances.

(1) only

(1) and (2)

(1), (2) and (3)

(1) or (2) or (3)

12. Standard on Quality Control (SQC) 1 provides that,

unless otherwise specified by law or regulation, audit documentation is the property of the management.

unless otherwise specified by law or regulation, audit documentation is the property of those charged with governance.

unless otherwise specified by law or regulation audit documentation is the property of management or those charged with governance.

unless otherwise specified by law or regulation audit documentation is the property of auditor.

13. As explained in SA 200, “Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing”, _________is obtained when the auditor has obtained sufficient appropriate audit evidence to reduce audit risk (i.e., the risk that the auditor expresses an inappropriate opinion when the financial statements are materially misstated) to an acceptably low level.

absolute assurance

limited assurance

reasonable assurance

reasonable or absolute assurance

14. ________ sets the scope, timing & direction of the audit and guides the development of the more detailed plan.

Audit Programme

Overall Audit Strategy

Completion Memorandum

Audit Plan

15. Planning is ______ process of an audit that often begins shortly after (or in connection with) the completion of the previous audit and continues until the completion of current Audit engagement:

continuous

discrete

neither continuous nor discrete

strategic

16. Statement 1: The establishment of the overall audit strategy and the detailed audit plan are not necessarily discrete or sequential process but are closely inter-related. Statement 2: The auditor shall establish an overall audit strategy that guides the development of audit plan.

only Statement 1 is correct

Only Statement 2 is correct

Both Statements 1 & 2 are correct

Both Statements 1 & 2 are incorrect

17. which of the following is not addressed by the overall audit strategy :

scope of the audit

timing of the audit

direction of the audit

monitoring of the audit

18. The overall audit strategy and the audit plan remain the _______ responsibility

auditor’s

management’s

those charged with governance.

both management and those charged with governance.

19. Determining a percentage to be applied to a chosen benchmark (in relation to materiality) involves the exercise of ________

Independence

Professional judgement

Professional skepticism

Professional behaviour

20. Which of the following is not an example of benchmarks in determining materiality for the Financial Statements as whole:

Profit before tax

total revenue

audit programme

total equity

Chartered Notes

CA Inter Auditing and Assurance Quiz ( ICAI MCQ 1-20 )

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