Question 1

What must an auditor consider when undertaking an audit?

a.

All of the above

b.

TheCompanies Act

c.

Ethical standards issued by the professional bodies

d.

Accounting standards

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Question2

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A financial statement audit provides which level of assurance?

a.

An acceptable level of assurance

b.

A moderate level of assurance

c.

A low level of assurance

d.

A high level of assurance

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Question3

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Who are the primary financial report users that auditors need to be concerned about?

a.

Shareholders of the firm

b.

The general public

c.

Managers of the audited firm

d.

Banks who provide capital to the firm

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Question4

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What best describes the 'agency problem' that results in a demand for audits?

a.

Banks have different information expectations to shareholders

b.

Managers' act first in the interests of shareholders to the detriment of creditors

c.

Shareholders act in their own interests and not in the interests of the company

d.

Managersact in their own interests rather than the interests of shareholders.

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The Audit committee should provide independent oversight of the independence of the auditor and other assurance providers

Select one:

True

False

Question6

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The essence of a financial report audit is to:

a.

Determine whether the client's financial reports are fairly stated

b.

Detect fraud

c.

Examine individual transactions so that the auditor may certify as to their validity.

d.

Assure the consistent application of correct accounting procedures

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Question7

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Financial report auditing can best be described as:

a.

a professional activity that measures and communicates financial and business data

b.

a branch of accounting

c.

a regulatory function that prevents the issuance of improper financial information

d.

a discipline that attests to the results of accounting and other functional operations and data

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Which of the following is not an attribute of an external auditor?

a.

Integrity

b.

Professional competence with regards to underlying subject matter

c.

Client advocacy

d.

Objectivity

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Question9

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Professional judgment means a judgment taken by the auditor out of his ______ in an audit situation

a.

Past experience

b.

Relation with the management

c.

Work experience

d.

Professional experience

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Question10

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An auditor is required to determine the ________ of his audit procedures according to the requirements of Standards of Auditing.

a.

Size of the organisation

b.

Nature, timing and extent

c.

Limitation

d.

Conduct

Question28

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Ethical leadership and corporate citizenship is a code of governance principle

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True

False

Question29

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The primary objective of auditing is to guide the organisation to come up with better and acceptable financial statements

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True

False

Question30

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Management is responsible for the preparation of the financial statements of the organisation. Is this statement true or false?

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True

False

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Approval of the external auditor's report is done by the nomination committee

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True

False

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The phrase "public interest" is used in determining whether a company's financial statements should be audited or independently reviewed.

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True

False

Question33

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The chairman of the board should be a member of the audit committee provided he has the requisite knowledge

Select one:

True

False