QUIZ AUDIT
When an independent auditor decides that the work performed by internal auditors may have a bearing on the nature,
timing and extent of contemplated audit procedures, the independent auditor should plan to evaluate the objectivity
of the internal auditors. Relative to objectivity, the independent auditor should:*
a. Examine the quality of the internal audit reports.
b. Consider the organization level to which internal auditors report the results of their work.
c. Review the quality control program in effect for the internal audit staff.
d. Consider the qualifications of the internal audit staff.
If the auditor anticipates reliance on the client’s internal controls, the auditor would:*
a. Eliminate the need for performance of substantive tests.
b. Test controls and use the results of testing as a basis for determining the nature, timing and extent of
substantive tests.
c. No longer perform tests of controls and proceed immediately to substantive tests.
d. Perform tests of controls and increase the amount of substantive tests.
As required by PSA 500 Audit Evidence, the auditor’s substantive procedures should include the following:*
Agreeing the financial statements to the underlying accounting records.
a. Examining material journal entries and other adjustments made during the course of preparing the financial
statements.
b. Either of the statements above.
c. Neither of the statements above.
If the auditor wants to perform more effective substantive tests, the auditor will perform:*
a. Test of details and analytical procedures in equal proportion.
b. More analytical procedures and less test of details (transactions and balances).
c. Neither test of details nor analytical procedures.
d. More test of details (transactions and balances) and less analytical procedures.
In connection with planning phase of an audit engagement, which of the following statements is always correct?*
a. Final staffing decision must be made prior to completion of the planning stage.
b. Observation of inventory count should be performed at year end.
c. An engagement should not be accepted after the client’s financial year-end
d. A portion of the audit of a continuing client can be performed at interim dates.
Which one of the following is the primary reason for documenting audit work?*
a. To supply a point of reference for all auditors performing the work subsequently.
b. To provide a stand-alone medium that gives audit conclusions and supports the opinion.
c. To give the client a full reporting of all work performed on their behalf.
d. To prevent litigation by other parties that question the audit performance.