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1. An auditor considers that his work has been deliberately frustrated by management to such an extent that he has been unable to carry out a proper audit because management has prevented him from gathering sufficient appropriate evidence for accounts receivable, inventory and liabilities. What action should the auditor take?
2. What document usually forms the basis of the audit team briefing?
3. What is an audit programme?
4. To understand an entity, auditors use various sources of information. Such sources include
I. The company's systems procedure manuals
II. The internal audit function's system notes
III. The prior year audit file
IV. Inquiries made of company staff
V. The company's website
Which THREE would be the best sources of information about a
company's financial systems?
5. What is detection risk in the context of audit risk?
6. During the final audit of a large multi-national listed conglomerate, it is suspected that systematic errors that have occurred within the integrated computer system are a result of mainframe programming inadequacies.
Which tests are most likely to confirm these suspicions?
7. Which of the following statements is not true regarding the auditor's responsibility for subsequent events?
8. There are many elements within an audit that ensure the audit is completed effectively and efficiently. Four such elements are:
I. Direction and supervision of audit staff
Il. Monitoring of time and costs
Ill. Preparation of adequate working papers
IV. Review of work carried out by audit staff
What are the two most important elements relating to audit finalization?
9. AB & Co has not complied with certain aspects of an applicable financial reporting standard. The auditor concurs with the departure in that if AB & Co had applied all aspects of the standard, the company's financial statements would not have shown a true and fair view. It has not been disclosed as a departure from an applicable financial reporting standard in the accounting policy note.
What form should the audit report take?
10. The use of standardised working papers may improve the efficiency with which the audit file is prepared and reviewed. However, the extent to which a standardised approach is desirable will vary from audit to audit and will be more appropriate for some forms of documentation than others. For which document would a standardised approach be particularly appropriate?
11. Which of the following approaches to evaluating the reasonableness of an accounting estimate would provide insufficient audit evidence?
12. Which of the following types of assumptions would an auditor be concerned about when evaluating the reasonableness of an entity's accounting estimates?
13. Which of the following is not a factor that may influence estimation uncertainty?
14. How does the auditor use "test data" in computer assisted audit techniques?
15. A large manufacturer has a computerised open-item sales ledger, holding 2,000 customer accounts. The principal files within the system are the customer master file, sales ledger file, and transactions history file. What audit test could be assisted by a computer enquiry from the sales ledger files against the customer master file?
16. Which of the following is an advantage of using standardised working papers?
17. Auditors' working papers are conventionally divided into current and permanent files for both convenience and control. Which of the following is most likely to appear on the permanent audit file as opposed to the current audit file?
18. During the audit of Addo Ltd a small company with shares totally owned by the directors, it has become apparent that the system of internal controls is not sufficiently reliable for audit purposes. What form should the audit report take?
19. The accounts of Jay Co include a material receivable that management believe will be paid and does not require any allowance. The auditors do not believe that any part of the balance will be paid. What form should the audit opinion take?
20. A company's financial statements include an investment of GHS45,000 in a company which is in liquidation. It is not yet clear what, if anything, will be recovered. Pending the final report of the liquidators, no allowance has been made in the financial statements. The situation is fully explained in a note to the financial statements. Profit before tax is GHS200,000.
What form should the audit opinion take?
