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1.Which of the following statements is incorrect?
a. Management assertions are implied or expressed representations by management about classes of transactions, account balances and presentation and disclosures contained in the financial statements.
b. Transaction cycles may vary from one entity to another and may also be affected by the nature of industry of the client.
c. The primary goal of an auditor in an audit is to issue an opinion that the financial statements of an entity are fairly stated, in all material respects, in accordance with the applicable financial reporting framework.
d. Reasonable assurance is moderate but not absolute level of assurance that the financial statements are free from material misstatements.
2. Which of the following statements does not pertain to responsibilities of management and those in charge of governance?
a. Establish and implement internal controls relevant to the preparation of financial reports.
b. Adopt appropriate accounting policies and in making reasonable accounting estimates.
c. Provide the auditor unrestricted access to all persons within and outside the entity from whom the auditor deems it necessary to obtain evidence relevant to the audit.
d. Preparation of financial statements in accordance with the applicable financial reporting framework.
3. The cash account affects all the transaction cycles except:
a. Inventory and warehousing cycle
b. Capital and repayment cycle
c. Payroll cycle
d. Revenue to collection cycle
4. The auditor confirms the receivable of the entity to the entity’s customers:
a. Cutoff
b. Valuation
c. Existence
d. Completeness
5.Verifying the measurement of investments against published price quotations in the market.
a. Existence
b. Valuation
c. Rights
d. Completeness
6. Revenue recognized by the client is correctly measured and captured in the accounting records.
a. Valuation
b. Cutoff
c. Occurrence
d. Accuracy
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