Audit_MCQ - MCQ SET 1 (UK09J) 1 W ith regard to which of...

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MCQ SET 1 (UK09J) 1 With regard to which of the following financial statement assertions may an auditor encounter particular difficulties in obtaining sufficient evidence where internal controls are weak? A Ownership B Existence C Valuation D Completeness 2 The auditors of Three Limited recently completed their interim audit for the year ending 31 July 2009. They confined their work only to tests of control on accounting records to 31 March 2009 and concluded that controls were totally unreliable. What will be the nature of the work carried out when conducting the final audit of the company’s financial statements for the year ending 31 July 2009? A Tests of control on the system and substantive procedures on transactions for the period from 1 April 2009 to 31 July 2009, plus a review of the financial statements. B Tests of control on the system for the period from 1 April 2009 to 31 July 2009, substantive procedures on the balance sheet as at 31 July 2009, plus a review of the financial statements. C Substantive procedures on transactions for the whole accounting period and on the balance sheet as at 31 July 2009, plus a review of the financial statements. D Substantive procedures on the balance sheet as at 31 July 2009, plus a review of the financial statements. 3 What is the principal purpose of the engagement letter in respect of a limited company audit assignment? A To set out the proposed timetable for the audit. B To define the extent of the auditors’ responsibilities. C To define the extent of the directors’ responsibilities. D To set the audit fee for the current year. 4 Which of the following correctly describes the stages of an audit during which the auditor must make use of analytical review procedures? A At the planning stage and at the overall review stage of the audit. B At all stages of an audit other than the planning stage. C In the closing stages of the audit only, when conducting the overall review of the financial statements. D At the planning stage and the substantive procedures stage of the audit.
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5 Which of the following would normally be retained on the current file maintained for a limited company audit client? A Narrative notes describing the company’s accounting systems. B A copy of the company’s constitution. C A management representation letter. D A description of the company’s business and its operations. 6 Which of the following questions would you expect to find on an Internal Control Evaluation Questionnaire (ICEQ) for the payroll system of a limited company? (1) Can the payroll supervisor authorise the payment of wages? (2) Can employees be paid for work not done? (3) Can bonuses be wrongly paid? (4) Can statutory deductions be incorrectly recorded? A 1, 2 and 3
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Audit_MCQ - MCQ SET 1 (UK09J) 1 W ith regard to which of...

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