An Interesting Quiz On Audit Theory

9 Questions | Total Attempts: 2180

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Audit Theory Quizzes & Trivia

The objective of an audit of financial statements is to enable the auditor to express an opinion whether the financial statements are prepared, in all material respects, in accordance with an identified financial reporting framework. Test your understanding on the audit theory topic by taking up the simple quiz below. All the best!


Questions and Answers
  • 1. 
    The series of tasks and records of an entity by which transactions are processed as a means of maintaining financial records.
    • A. 

      Computer information system

    • B. 

      Internal control system

    • C. 

      Accounting system

    • D. 

      Control environment

  • 2. 
    The measure of the quality of audit evidence and its relevance to a particular assertion and its reliability.
    • A. 

      Sufficiency

    • B. 

      Appropriateness

    • C. 

      Significance

    • D. 

      Assurance

  • 3. 
    It serves as a set of instructions to assistants involved in the audit and as a means to control the proper execution of the work.
    • A. 

      Audit program

    • B. 

      Overall audit plan

    • C. 

      Engagement letter

    • D. 

      Internal control questionnaire

  • 4. 
    Detection risk is
    • A. 

      The risk that the auditor gives an inappropriate audit opinion when the financial statements are materially misstated.

    • B. 

      The risk that a misstatement, that could occur in an account balance or class of transactions and that could be material individually or when aggregated with misstatements in other balances or classes, will not be prevented or detected and corrected on a timely basis by the accounting and internal control systems.

    • C. 

      The risk that an auditor's substantive procedures will not detect a misstatement that exists in an account balance or class of transactions that could be material, individually or when aggregated with misstatements in other balances or classes.

    • D. 

      The susceptibility of an account balance or class of transactions to misstatement that could be material, individually or when aggregated with misstatements in other balances of classes, assuming that there were no related internal controls.

  • 5. 
    Tolerable error means
    • A. 

      An error that arises from an isolated event that has not recurred other than on specifically identifiable occasions and is therefore not representative of errors in the population.

    • B. 

      An error that the auditor expects to be present in the population.

    • C. 

      The maximum error in a population that the auditor is willing to accept.

    • D. 

      The possibility that the auditor's conclusion, based on a sample may be different from the conclusion reached if the entire population were subjected to the same audit procedure.

  • 6. 
    The current period’s auditor who did not audit the prior period’s financial statements is called
    • A. 

      Predecessor auditor.

    • B. 

      Other auditor.

    • C. 

      Incoming auditor.

    • D. 

      Principal auditor

  • 7. 
    Principal auditor is
    • A. 

      The auditor who audited and reported on the prior period's financial statements and continues as the auditor for the current period.

    • B. 

      A current period's auditor who did not audit the prior period's financial statements.

    • C. 

      The auditor who was previously the auditor of an entity and who has been replaced by an incoming auditor.

    • D. 

      The auditor with responsibility for reporting on the financial statements of an entity when those financial statements include financial information of one or more components audited by another auditor.

  • 8. 
    They are not presented as complete financial statements capable of standing alone, but are an integral part of the current period.
    • A. 

      Corresponding figures

    • B. 

      Comparative financial statements

    • C. 

      Supplementary report

    • D. 

      Notes of financial statements

  • 9. 
    The applications of auditing procedures using the computer as an audit tool refer to
    • A. 

      Integrated test facility

    • B. 

      Data-based management system

    • C. 

      Auditing through the computer

    • D. 

      Computer assisted audit techniques

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