ca_exm_au1_2009-06 - CGA-CANADA EXTERNAL AUDITING [AU1]...

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EAU1J09 ©CGA-Canada, 2009 Page 1 of 6 CGA-CANADA EXTERNAL AUDITING [AU1] EXAMINATION June 2009 Marks Time: 3 Hours 30 Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note: 2 marks each a. When an auditor encounters a material GAAP departure that is unresolved at the conclusion of the audit, which of the following opinions are possible? 1) Qualified or adverse 2) Unqualified or qualified 3) Only adverse is possible 4) Qualified, denial, or adverse b. Which of the following would require a denial of the audit opinion? 1) There is a material misstatement that in the auditor’s opinion will overstate the value of an investment by $1,000,000. 2) There is a misstatement that is in the range of $200,000 to $300,000 (materiality is $100,000), but that cannot be calculated exactly because it involves an estimate. 3) The auditor concludes that there is a going-concern issue for the auditee company. 4) The auditor was not appointed as the auditor until after year end, after the inventory count, and was unable to satisfy herself concerning inventory values by other means. c. When an auditor encounters a material scope limitation that is unresolved at the conclusion of the audit, which of the following opinions are possible? 1) Qualified or adverse 2) Unqualified or qualified 3) Only adverse is possible 4) Qualified or denial d. Which of the following is true concerning internal and external auditors? 1) Internal and external auditors must be independent, but they define independence differently. 2) Internal and external auditors require the same professional designation. 3) Internal and external auditors both report to the shareholders of the company. 4) Internal and external auditors both increase the internal control of a company. e. Which of the following could indicate that the risk of fraud and other irregularities perpetrated by senior management is higher than normal? 1) There are very few related party transactions. 2) The auditor has not audited this client before. 3) Management turnover is unusually high. 4) The auditor discovers a GAAP departure during the audit. Continued. ..
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EAU1J09 ©CGA-Canada, 2009 Page 2 of 6 f. Which of the following statements relates to the ownership assertion? 1) Inventory listings are accurately included in the inventory accounts. 2) Inventory excludes items billed to customers. 3)
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This note was uploaded on 03/30/2012 for the course ACCOUNTING 1204 taught by Professor Chang during the Spring '11 term at Nanjing University.

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ca_exm_au1_2009-06 - CGA-CANADA EXTERNAL AUDITING [AU1]...

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