21.The use of an audit engagement letter is the best method of assuring the auditor will have which of the following? a) Auditor will obtain sufficient appropriate audit evidence. b) Management representation letter c) Access to all books, accounts and vouchers required for audit purpose d) Cooperation from other auditors
MCQ'S QUESTION BANK IN AUDITING/B14________________________3
MASTER MINDS - QUALITY EDUCATION BEYOND YOUR IMAGINATION
22.The use of an audit engagement letter is the best method of documenting i) the required communication of significant deficiencies in internal control ii) significantly higher control risk than that assessed in prior audit. iii) Objective and scope of auditor's work iv) Notification of any changes in the original arrangements of the audit.
a) (i) and (ii) b) (i) and (iii) c) ii and (iv) d) (iii and (iv)
23.An auditor who accepts an audit but does not possess the industry expertise of the business entity should a) engage experts b) obtain knowledge of matters that relate to the nature of entity's business c) inform management about it d) take help of other auditors
24.The least important element in the evaluation of an audit firm's system of quality control would relate to a) assignment of audit assistants b) system of determining audit fees c) consultation with experts d) confidentiality of client's information
25.The primary purpose of establishing quality control policies and procedures for deciding on client evaluation is to a) ensure adherence to generally accepted auditing standards b) acceptance or retention of clients whose management does not lack integrity c) ensure audit fees is charged according to the type of audit work assigned d) all of the above
26.Which of the following is not a quality control consideration on accepting a new client? a) Availability of audit assistants with necessary skill and competence. b) Provision of other services to the client which may impair independence c) Predecessor auditor's advice as to whether audit fees were paid promptly d) Review of audit work done by one partner by the other
27.An auditor obtains knowledge about a new client's business and its industry to a) Make constructive suggestions concerning improvements to the client's internal control system. b) Evaluate the appropriateness of audit evidence obtained c) Under stand the events and transactions that may have an effect on client's financial statements. d) All of the above