auditing theory questions.doc - TOPIC 1 – OVERVIEW OF AUDIT...

TOPIC 1 – OVERVIEW OF AUDIT & PRE-ENGAGEMENT ACTIVITIES
Overview of Auditing
1. Which is the primary objective of the independent auditor in auditing the
financial statements?
(a) To express an opinion on the financial viability of the client.
(b) To express a conclusion as to the accuracy of balances of client GL
accounts.
(c) To express an opinion on the fairness of the financial statements.
(d) To satisfy governmental requirements.
2. Most of the independent auditor’s work in formulating an opinion on the
financial statements consists of
3. This is an examination of part of an organization’s
procedures and methods for the purpose of evaluating
efficiency and effectiveness of doing business is what type of
audit?
4. This is an audit that is intended to determine whether an
entity is following specific procedures or rules set down by
some higher authority is classified as a(n):
5. In auditing financial accounting data, the primary concern is with:

(a) Determining whether recorded information properly reflects the
economic events that occurred during the accounting period.
(b) Determining if fraud has occurred.
(c) Determining if taxable income has been calculated correctly.
(d) Analyzing the financial information to be sure that it complies with
government requirements.
6. Which one of the following is more difficult to evaluate objectively?