ca_exm_au1_2010-06 - CGA-CANADA EXTERNAL AUDITING[AU1...

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EAU1J10 ©CGA-Canada, 2010 Page 1 of 6 CGA-CANADA EXTERNAL AUDITING [AU1] EXAMINATION June 2010 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. What is the role of the Canadian Public Accountability Board? 1) To develop auditing standards for the CICA Handbook 2) To conduct inspections of accounting firms to assess their ability to protect the public interest 3) To recommend audit firms to members of the general public 4) To review audit reports before they are issued at the end of an external audit b. Which of the following is true concerning external and internal auditors? 1) Both types of auditors need to be independent to function effectively. 2) Both may be employees of the company being audited. 3) Both focus on the audit of financial statements. 4) Only the external auditor has a duty of care. c. Which of the following best describes an auditor’s engagement risk? 1) Engagement risk is the risk that the auditor may be sued. 2) The 3 components of engagement risk are inherent risk, control risk, and detection risk. 3) Engagement risk is the risk that the auditor may not be paid for the audit engagement. 4) Engagement risk cannot be controlled by the auditor, therefore the auditor must be very careful about which audit engagements to accept. d. What is the purpose of the introductory paragraph of the standard audit report? 1) To identify GAAS as the standard used by the auditor 2) To make the reader aware that the auditor has examined the records only on a test basis 3) To advise the reader that the auditor only provides reasonable assurance 4) To identify the financial statements covered by the auditor’s report and to distinguish the responsibilities between management and the auditor e. What audit opinions would be possible when the audited company refuses to record adequate amortization for fixed assets? Assume the amount in question exceeds materiality. 1) Only unqualified or adverse opinions are possible. 2) Only qualified or adverse opinions are possible. 3) Only adverse or denial opinions are possible. 4) Only qualified or unqualified opinions are possible. Continued. ..
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EAU1J10 ©CGA-Canada, 2010 Page 2 of 6 f. Which of the following would be associated with a review engagement? 1) Substantive and compliance testing 2) Notice to reader report 3) Conformity with GAAP and GAAS 4) Negative assurance g. Which of the following is an auditor responsible for concerning the detection of illegal activities of an audit client? 1)
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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_2010-06 - CGA-CANADA EXTERNAL AUDITING[AU1...

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