TUTORIAL_2 - TUTORIAL 2 A: Multiple choice questions 1....

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TUTORIAL 2 A: Multiple choice questions 1. Which of the following best describes the reason why an independent auditor reports on financial statements? (a) A misappropriation of assets may exist and it is more likely to be detected by independent auditors (b) Different interests may exist between the company preparing the statements and the persons using the statements (c) A misstatement of account balances may exist and is generally corrected as the result of the independent auditor’s work (d) Poorly designed internal controls may be in existence 2. An independent audit aids in the communication of economic data because the audit: (a) confirms the accuracy of management’s financial representations (b) lends credibility to the financial statements (c) guarantees that financial data are fairly presented (d) assures the readers of financial statements that any fraudulent activity has been corrected 3. An auditor would probably analyse inventory turnover rates to obtain evidence concerning management’s assertions about: (a) existence or occurrence (b) rights and obligations (c) valuation or allocation (d) presentation and disclosure 4. The client’s board of directors and audit committee refused to take any action
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TUTORIAL_2 - TUTORIAL 2 A: Multiple choice questions 1....

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