CA Intermediate Auditing & Assurance MCQ

1. Which of the following is correct :

2. Audit risk is a function of the

3. If the auditor concludes that there is reasonable justification to change the engagement and if the audit work performed complied with the SAs applicable to the changed engagement, the report issued would be appropriate for the revised terms of engagement. In order to avoid confusion, the report would not include reference to:

4. As explained in SA 200, “Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing”, _________is obtained when the auditor has obtained sufficient appropriate audit evidence to reduce audit risk (i.e., the risk that the auditor expresses an inappropriate opinion when the financial statements are materially misstated) to an acceptably low level.

5. ____________refers to a difference between the amount, classification, presentation, or disclosure of a reported financial statement item and the amount, classification, presentation, or disclosure that i s required for the item to be in accordance with the applicable financial reporting framework.

6. Audit evidence includes

7. Standard on Quality Control (SQC) 1 provides that,

8. SA 320 on “Materiality in Planning and Performing an Audit” requires that an auditor

9. The assessment of the risks of material misstatement may be expressed in

10. Most of the auditor’s work in forming the auditor’s opinion consists of obtaining and evaluating audit evidence.

11. When planning the audit,

12. Risk of material misstatement may be defined as the risk

13. Auditor’s judgment as to sufficiency may be affected by the factors such as:

14. Audit procedures to obtain audit evidence can include

15. Which of the following is not an example of audit documentation

16. A request from the client for the auditor to change the engagement may result from-
1. a change in circumstances affecting the need for the service,
2. a misunderstanding as to the nature of an audit or related service originally requested
3. a restriction on the scope of the engagement, whether imposed by management or caused by circum stances.

17. The susceptibility of an assertion about a class of transaction, account balance or disclosure to a misstatement that could be material, either individually or when aggregated with other misstatements, before consideration of any related controls is-

18. The assessment of risks is a

19. If the auditor is unable to agree to a change of the terms of the audit engagement and is not permitted by management to continue the original audit engagement, the auditor shall:

20. Audit documentation provides: