TRUE-FALSE STATEMENTS
3. A compliance audit involves gathering evidence to ascertain
whether the person or entity under review has followed the
rules, policies, procedures, laws and regulations with which they
must conform
6. The nature of audit procedures refers to the reliance on
evidence provided by the client and its management.
8. An auditor can provide a reasonable level of assurance on
information other than historical financial information.
9. A reasonable level of assurance is the highest level of
assurance that an auditor can provide.
MULTIPLE CHOICE QUESTIONS
14. Martha Minnati was reviewing the previous year’s audited
financial statements of a clothing manufacturer. Her manager
explained to her that for a financial statement audit, the clothing
company was the accountable party, its shareholders were the
users, and the subject matter was the financial statements. What
kind of audit engagement was her manager describing?
a) consulting engagementb) assurance engagementc) review engagementd) compliance engagementAnswer: b
15. An engagement performed by an auditor or consultant to enhance the reliability of the subject matter can best be described as a(n)
16. An example of the three parties in an assurance engagement would be:
17. A limitation of an audit is caused by
period of time and at a reasonable cost.
18. Which of the following groups would be considered users of the financial statements?
a) governmentsb) current shareholdersc) general publicd) all of the aboveAnswer: d
19. The sources of demand for audit and assurance services doesnotinclude
20. An audit is one way for investors to insure against at least part of their loss should the company they invest in fail – this is an example of
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- Fall '19
- Financial audit, Auditor's report
