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1.

In determining of the primary responsibility of external auditor to an audit of financial

c. staff holder, creditor and investing public


d. audit committee of the client, because the audit committee is the responsible

Answer : C

2. In the company whose F.S are an unaudited , has engaged a CPA to make a special review or
report on in this accounting control or in general which of the following to this report is least
useful
a. In this management
b. The independent auditor in this parent company
c. A regulatory agencies having jurisdiction
d. Present and prospective customers
Answer : D

3. It is not an audit objective when audit manufacturing equip and depreciation to determine
whether
a. Cost and related revelation , abandonment or disposals
b. Balances of the property account , in the preceding year are properly stated
c. Addition represent actual property whether resolve or rented
d. Balances in accumulated account are reasonable , units and possible net salvage
Answer : C

4. In order to make materiality decision when a condition are requiring , the auditor must evaluate
a. All effects on the financial statement
b. The effect of the financial statement which contains the erroneous account
c. Magnitude of the errors of the account involve
d. the effect of both the financial statement and balance sheet
Answer : A

5. The audit profession recognizes the need for uniformity in reporting as a means of
a. Defending against capricious losses
b. Upgrading the communication skills of auditor
c. Standardizing the policies of values of CPA
d. Avoiding confusion
Answer : D

6. An audit engagement perform by the CPA firm with one office at the minimum knowledge of the
relevant professional accounting standard, should be held by
a. the auditor with final responsibility of the audit
b. All professional working upon the audit
c. All professional working upon the audit and the partner in charge of the CPA firm
d. All the prof working in the office
Answer: A.

7. Independence is required whenever a prof accountant performs


a. Tax consultancy services
b. Non assurance services
c. Professional services
d. Assurance services
Answer : D
8. The essence of due care principle is that the auditor should not be guilty of
a. Fraud
b. Negligence
c. Bias
d. Errors in adjustment
Answer : B

9. Competence as a CPA includes all of the following except


a. Warranting in the infallibility of the work performed
b. Consulting others if addition technical is exempt
c. Possessing, in to supervise in evaluating of staff work
d. Having the technical qualification to perform and engagement
Answer : A

10. The review of the company’s financial Statements by a CPA firm


a. as to the fairness of the statements
b. add similar cope of the audit and add similar statement
c. is substantially less its cost
d. requires details analysis of minor accounts
Answer : C

11. The auditors best defense when material misstatements are not uncovered in the audit is that
A. The audit was conducted in accordance with PSA
B. The audit was conducted with GAAP
C. Client is guilty of contributing negligence
D. The Financial Statement are the client’s responsibility
Answer : A
12. While performing a substantive test of details during an audit the auditor determines that
sample conclusion that recorded in the balance was materially misstated it was in fact not
martially misstated, this illustration illustrate the risk of
A. Alpha risk
B. Beta risk
C. Assessing control risk too low
D. Assessing control risk too high
Answer : A

13. Most of the independent auditor’s work in formulating an opinion n f.s consists of
A. Obtaining and examining evidence
B. studying
C. Examining cast transact
D. Comparing recorded accountability with asset
Answer : A

14. A CPA shall not disclose confidential information obtain during of audit engage in
A. To a successor of auditor without the client’s permission
B. , when sued by client
C. With the consent of the client
D. When a security f the state requires
Answer :

15. When performing a review of financial Statement the CPA is required to


A. Obtain understanding of the client’s business and industry
B. Obtain corroborating evidence to support management inquiry
C. Assess the effectiveness of the client’s, accounting and internal control systems
D. Apply analytical procedures and make inquires from third parties by sending confirmation
letter.
Answer : A
16. A client has a calendar year end ,listed below are four event that occurred after dec 31, which of
these subsequent events might resolve in adjustment in the dec 31 financial statement.
A. Sale of a major subsidiary
B. Adaptation of accelerated depreciation method
C. Write off of substantial portion of inventory obsolete
D. Collection of accounts receivable existing as of dec. 31
Answer : A

17. In planning the audit engagement, the auditor should consider each of the following, except
A. The kind of opinion that are likely to be expressed
B. Anticipated level of control risk and materiality
C. The entities Accounting policies and procedures
D. Matter relating of the accounting matter and business which operates.
Answer : A

18. In an audit of financial statements, an auditor’s primary consideration regarding in internal


control activity is whether the control
A. Affects management’s f. s assertion
B. Reflection management philosophy and operating style
C. Provides adequate safeguards over of access to assets
D. enhances management decision making
Answer : A

19. An important aspect of control is the separation of incompatible duties among the client’s
employees this is often difficult to implement in an IT Environment because
A. authorization, procedures are difficult to implement when using it system
B. frequently it system are design to allow employees to access in computer authorization
C. IT system lack the paper require to identify who
D. Accounting function are concentrated in the computer
Answer : D

20. Which of the following circumstances, most likely would cause an auditor would believe that a
material
A. There were substantial payments for services that appear
B. Operating a financing decision are dominated by top management
C. Auditor trails of computer generated of transact exist only on short period of time
D. The chief financial officer , until the last day of auditor field work
Answer : A

21. Internal control is ineffective when computer dept. Personnel


A. Participate in computers software acquisition decision
B. Design and documentation for computerized
C. Provide physical security for program files
D. Originated changes in master files
Answer: D

22. Which of the following elements of the auditor’s report affirms the auditor’s independence
a. introductory paragraph
b. auditors’ responsibility
c. title
d. signature
Answer : C

23. The auditors opinion covers the complete set of financial statement, a complete set of financial
statement does not include
A. Statement of changes In financial position
B. Statement of comprehensive income
C. Statement of cash flow
D. Summary of significant accounting policies and other explanatory explanation
Answer : A

24. The most common type of audit report, the obtain


A. Adverse opinion
B. Qualified opinion
C. Disclaimer
D. Unmodified audit
Answer : D

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