1. Select all the correct statements about audit evidence! a) Sufficiency is a measure of the quantity of audit evidence, while adequacy is a measure of quality. b) If the auditor cannot obtain sufficient evidence, they should express a qualified opinion or disclaim an opinion. c) Auditors are not required to assess whether the audited entity is capable of continuing as a going concern. d) Internal documentation is less reliable evidence than external documentation.
2. Audit of economy, efficiency, and effectiveness is called: a) Compliance audit b) Financial statement audit c) Operational audit d) Government audit
3. Select all the incorrect statements regarding risk! a) Inherent and control risks differ from detection risk in that they arise from incorrectly applied audit procedures. b) Inadequate assessment of bad debt indicates inherent risk. c) Inefficiency in the segregation of duties in the assets sector of a bank indicates the existence of inherent risk. d) The risk that an account balance or class of transactions contains a significant error that the organization's internal control system did not prevent or detect is called inherent risk.
4. The evidence-gathering technique that involves obtaining a response to confirm information contained in accounting records is called: a) Inspection b) Observation c) Confirmation d) Computation
5. Permanent audit documentation includes: a) Extract from the commercial register b) Audit program c) Profit distribution plan d) Information about internal control
6. Identify the correct statements related to internal control: a) A deficiency in internal control occurs when necessary controls are missing to prevent, detect, and correct misstatements in financial statements. b) The auditor designs and implements internal control in the audited entity. c) The auditor should communicate deficiencies in internal control to authorized management personnel in a timely written form. d) The auditor is not obligated to identify deficiencies in internal control during the audit process.
7. Auditor's responsibility for expressing an opinion on financial statements: a) Indirectly expressed in the standard audit report b) Directly expressed in the introduction of the standard audit report c) Directly expressed in the scope as part of the standard report d) Directly expressed in the opinion as part of the standard report
8. According to ISA 501 Audit Evidence - Specific Considerations, specific situations in obtaining audit evidence include: a) Information about a business segment b) Attendance at physical inventory count c) Fraudulent activities d) Procedures related to litigation and claims.
9. The situations in which it is necessary for the auditor to include an emphasis of matter paragraph relate to: a) Uncertainty regarding the outcome of a legal dispute. b) When the auditor does not attend the physical inventory count. c) Significant catastrophes that have had, and continue to have, a significant impact on the entity's financial position. d) When the auditor is prevented by the client from obtaining sufficient evidence.
10. The auditor is required to adhere to the principle of confidentiality in performing the audit process for the client. Which of the following statements regarding the observance of the principle of confidentiality are correct? a) The auditor must keep all information confidential. b) Given that the auditor has freedom of expression, this freedom includes the right to disclose confidential client information. c) The auditor comes across confidential information during the audit. d) The auditor discloses information that is relevant to third parties for making business decisions.
11. The assessment of inherent risk depends on: a) Integrity and experience of management. b) Nature of the company's business. c) Results of previous audits. d) All of the above.
12. Which of the following best describes the objective of internal auditing? a) Assisting management in decision-making (adding value). b) Expressing an opinion on the fairness and objectivity of financial statements. c) The process of examining financial transactions that represent government revenues and expenses in terms of the legal use of funds.
13. Independence in the examination of a professional accountant according to the ethical code represents: a) Freedom to choose testing techniques and procedures. b) Absence of pressures and other influences in expressing opinions. c) Absence of pressures and other influences in selecting areas of activity, relationships, and policies. d) Management, relating to the comprehensiveness or availability of relevant information.
14. Evidence that does not belong to the permanent file includes: a) Extracts or copies of company documents (internal company acts, lists, etc.). b) Information related to understanding the system of internal controls and assessing control risk (organizational charts). c) Working trial balance for a specific period. d) Audit program (for each cycle or audit area) for a specific period. e) Supplier confirmations.
15. Methods of direction testing (special audit methods) are: a) Progressive and regressive method. b) Direct and indirect method. c) Formal and substantive method. d) Complete and skip method.
16. When selecting (forming) a sample, the auditor uses: a) Selection by key. b) Systematic selection. c) Interval selection. d) All of the above.
17. The most appropriate audit technique (procedure) for verifying the audit objective of assessing the accuracy of liabilities to suppliers is: a) Confirmation of liabilities to suppliers. b) Searching for unrecorded liabilities. c) Comparing selected amounts from the list of liabilities to suppliers with payment authorizations and other supporting documentation.
18. As evidence for discussing the appropriateness of the adjustment of doubtful and disputed receivables, the auditor obtains: a) Confirmation. b) Observation. c) Inquiries of employees and management. d) All of the above.
19. The auditor's obligation to refrain from expressing an opinion whenever there is no basis for it represents: a) Principle of responsibility. b) Principle of fair presentation. c) Principle of legality.
20. The risk of issuing an inappropriate opinion (e.g., positive) on significantly misstated information represents: a) Audit risk. b) Inherent risk. c) Control risk. d) Detection risk.