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MCQ: Which of these are types of Audit Report?

1. Unqualified opinion
2. Qualified opinion
3. Adverse opinion
4. Disclaimer of opinion
5. All of above

MCQ: You have been proposed as auditor of a company. What is the first step that you should take?

1. Obtain the client’s permission to communicate with the existing auditor
2. Obtain the existing auditor’s working papers
3. Obtain a copy of the company’s most recent board minutes
4. Obtain a copy of the existing auditor’s letter of engagement

MCQ: Which one of the following may auditors NOT perform for their client?

1. Taking management decisions
2. Preparation of accounting records
3. Preparing tax computations
4. Advising on weaknesses in the internal control systems

MCQ: Which of the following are fundamental ethical principles for professional accountants?
1 Competence
2 Compliance
3 Integrity
4 Objectivity

1. 1, 2 and 3 only
2. 1, 3 and 4 only
3. 2, 3 and 4 only
4. 1, 2 and 4 only

MCQ: An auditor should not accept a loan on favourable commercial terms from an audit client because of the threat to his or her independence. The threat would be a___________?

1. Self-interest threat
2. Self-review threat
3. Advocacy threat
4. Familiarity threat

MCQ: Which of the following statements is INCORRECT?

1. An auditor may serve on the board of directors of an audit client
2. An auditor who is an immediate family member of the director of an audit client must not be assigned to the audit team
3. Purchasing goods from an audit client on normal commercial terms does not create a threat to the auditor’s independence
4. An auditor who was recently a director of an audit client must not be assigned to the audit team for that client

MCQ: Which of the following is true about written representations?

1. They are the best source of audit evidence
2. They should be used only when there is a lack of other substantive audit evidence
3. They should be used only when there is other substantive audit evidence to complement it
4. Shareholders receive a copy of all material written representations

MCQ: Which of the following would you not use as a benchmark for comparison when undertaking analytical procedures?

1. Other audit clients
2. Previous years
3. Other companies in the same industry
4. Budget

MCQ: What is meant by the expression ‘expectation gap’?

1. The gap between how the directors of a company perform their duties and how the shareholders expect them to perform
2. The gap between how the directors of a company perform their duties and how the general public expects them to perform
3. The gap between the public perception of the role of company auditors and their statutory role and responsibilities
4. The gap between the auditors’ own perception of their duties and how they are set out in the Companies Act

MCQ: Which of the following does NOT belong in the auditors’ report?

1. Introductory paragraph specifying the pages to which the report relates and the accounting convention adopted
2. Basis of the opinion
3. Involvement of any specialist
4. Statement of responsibilities of directors and auditors