ANSWER IF THE SENTECES ARE TRUE OR FALSE:

1. The audit plan is developed before the audit strategy. True/False (2 marks)

2. Two important documents of the planning of the audit are the engagement letter and the risk assessment. True/False (2 marks)

3. Statistical sampling methods are more reliable than non-statistical methods. True/False (2 marks)

4. The auditor must always use stratification to ensure a representative sample is tested. True/False (2 marks)

5. Block selection is a statistical method of sampling. True/False (2 marks)

6. The auditor can rely on the expert's work and does not need to review it. True/False (2 marks)

7. Misstatements are issues identified during a test of control. True/False (2 marks)

8. The internal auditor's report is for management's use only. True/False (2 marks)

9. Before accepting an auditor's expert the external auditor must consider the expert's competence, capability and objectivity. True/False (2 marks)

10. A management's expert is someone appointed by the company to provide evidence for management which may be relied upon by the auditor. True/False (2 marks)

11. The depreciation charge calculation performed by the auditor is a more reliable source of evidence than the calculation of depreciation performed by management. True/False (2 marks)

12 Basis of fee calculations must be included in the enpagement letter. True/False (2 marks)

13. Materiality is a matter of professional judgement for the auditor. True/False (2 marks)

14. The restriction on the level of fee income that could be received from recurring work from a listed client is 10%. True/False (2 marks)

15 The audit committee must review the need for an internalauditfunction on an annual basis True/False (2 marks)

16. The audit plan sets out the scope, direction and framework of the audit. True/False (2 marks)

17. A deviation occurs when a result differs from expectation during a substantive procedure. True/False

(2 marks)

18. The objective of the internal audit is to express an opinion on the truth and fairness of the financial

statements in a written report. True/False (2 marks)

19. If the external auditor uses the internal auditor to provide direct assistance the external auditor must

assign work that is high risk and judgemental. True/False (2 marks)

20. Random selection sampling is a method where the auditor picks the sample with no structured

technique. True/False (2 marks)

21. A bank reconciliation prepared by the auditor is more reliable source of evidence than bank

reconciliation prepared by the client. True/False (2 marks)

22. There is an inverse relationship between risk and materiality. If audit risk is high, the materiality level

set by the audit will be lower. True/False (2 marks)

23. Cold Reviews take place before the opinion is signed. True/False (2 marks)

24. If the auditor tests the controls and the control risk is low no substantive procedures will be

performed during the audit. True/False (2 marks)

25. A limited assurance will be provided if the assurance firm is asked to provide a review of a forecast

profit and loss. True/False (2 marks)