According to ISA (UK) 580, Written Representations which TWO of the following must auditors obtain written representations about? A That the financial statements record and reflect all transactions B Material matters where other evidence is missing due to an emergency such as a fire or theft C The company's ability to continue as a going concern D Material uncertainties such as provisions where evidence is hard to obtain

According to ISA (UK) 580, Written Representations which TWO of the following must auditors obtain written representations about? A That the financial statements record and reflect all transactions B Material matters where other evidence is missing due to an emergency such as a fire or theft C The company's ability to continue as a going concern D Material uncertainties such as provisions where evidence is hard to obtain

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter4: Professional Liability, Auditor Judgment Frameworks, And Professional Responsibilities

Section: Chapter Questions

Problem 60RSCQ

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Question 23 Which of the following statements is correct regarding accounts payable and the auditor's procedures? Group of answer choices Because it is generally more difficult to discover a transaction that has not been recorded than to discover one that has been recorded incorrectly, the audit objective of completeness drives many of the substantive procedures applied to these balances. A judgment whether an unrecorded payable should be recorded before the financial statements are prepared depends entirely upon the source of the payable. The confirmation of accounts payable selected from the year-end trial balance of such accounts is most effective in discovering unrecorded liabilities. Unrecorded payables are often discovered through examining vouchers payable entered into the voucher register prior to the balance sheet date.
Question 44 Audit evidence can come in different forms with different degrees of persuasiveness. Which of the following is the least persuasive type of evidence? Group of answer choices Bank statement obtained from the client. Computations made by the auditor. Prenumbered client sales invoices. Vendor's invoice
estion 17 For audit evidence to be compelling to the auditor it must be sufficient and appropriate. Which statement below is not correct regarding the appropriateness of audit evidence? O A The more effective the internal control system, the more assurance it provides the auditor about the reliability of financial reporting by the client O B. The independent auditor's direct personal knowledge, obtained through inquiry, observation and inspection, is generally more persuasive than information obtained indirectly OC The timeliness of evidence is important as evidence is available only within certain time. OD None of the above.
Question 5 Which ONE of the following should be carried out after the audit firm has accepted an engagement as auditor? A Contact the outgoing auditors to ascertain if there are any reasons they should not accept the assignment B Ensure the audit firm has the experience and resources to conduct the assignment C Perform checks to ensure that there are no legal or ethical reasons why the new audit firm cannot act as auditor D Submit a letter of engagement to the directors
19. An auditor conducting an audit in accordance with ______________is responsible for obtaining reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error. a. ISAs b. None of the options c. IFRS d. IAS
Question 18 Which of the following statements is true regarding assertions in the revenue cycle? All five assertions presented are equally important Under normal audit risk conditions the occurrence assertion would be more relevant than the completeness assertion Audit evidence about the existence of revenues is also the most appropriate evidence about the valuation of accounts receivable The allowance for uncollectible accounts has important implications for the ownership assertion for accounts receivable
Question 3 ISA 315 Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and it's Environment requires Auditors to obtain an understanding of the entity and it's environment including it's internal control. Required; a) Explain why obtaining an understanding of the entity and it's environment is important for the auditor b) ISA 300 planning an audit of financial statements provides guidance to assist Auditors in planning an audit. Required; Explain the benefits of audit planning c) ISA 520 Analytical procedure provides guidance on the use of analytical procedures during the course of the external audit. Analytical procedures can be used as substantive audit procedures during audit fieldwork, as well as during planning and review. Required; Identify four factors to consider when using analytical procedures at the planning stage of the audit. d) Explain the difference between the interim audit and the final audit.
(c) ISA 240 the Auditor’s responsibilities relating to Fraud in an audit of financial statements, describesthe responsibilities of both management and the auditor with regard to preventing and detecting fraud.Required:i. Distinguish between fraud and error.ii. With an example each, distinguish between fraudulent financial reporting and misappropriation ofassets.
Question 19 If an auditor believes that a misstatement might be intentional and the effect on the financial statements could be material the auditor should do which of the following? Resign from the engagement Discuss with the audit committee what should be done to prevent possible future future misstatements. Perform additional procedures to obtain additional evidence to determine whether fraud has occurred or is likely to have occurred and whether there is a material impact on the financial statements. Contact local authorities.
Determine whether statement 1 and 2 are true or false 4. S1 - Generally, the more reliable internal controls are, the lesser the substantive test procedures the auditor would need to perform in auditing year-end account balances S2 - The industry in which the client operates may give rise to specific risks of material misstatements arising from the nature of the business or the degree of regulation a. False, False b. True, False c. False, True d. True, True
Question 6 Where the auditor has assessed the risk of material misstatement of trade creditors as low, the auditor may rightly decide: Select one: Not to perform any substantive testing at all provided he has persuasive evidence that controls had operated effectively for the period under audit. Perform analytical procedures provided he has persuasive evidence that the controls had operated effectively for the period under audit. Not to perform any “further" or “other" procedures. Not to perform any substantive testing at all.
16-In the context of documentation of the audit procedures performed and audit evidence obtained the ISA 230 says "Audit documentation is not a substitute for the entity's accounting records". Which one of the following statements is appropriately describing the documentation of the audit procedures performed and audit evidence obtained? a. None of the options correctly describe the statement b. Audit documentation is not required when accounting records are available c. Accounting records are not required when audit documentations are available d. Both accounting records and audit documentations are essential