Audit Theory Quiz Questions And Answers
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Take this audit theory quiz with informative questions and answers today to level up your auditing game! A framework for auditing is provided by audit theories. It works on uncovering the laws which govern the auditing process and helps form the basis of the role of audit. There are many theories that we will explore down below! Don't forget to share this quiz with all your friends. So, are you prepared to face this test? Let us begin!
- 1.Broadly define, the subject matter of any audit consists of
- A.
Financial statement
- B.
Economic data
- C.
Assertions
- D.
Operating data
- E.
None of the above
- 2.The criteria for evaluationg quantitative information vary. For example, in the case of an independent audit of financial statements by CPA firms, the criteria usually the
- A.
IFRS, IFRS for SMEs
- B.
International Accounting Standards
- C.
International Standard on Auditing
- D.
National Internal Revenue Code
- E.
Regularions of the Securities and Exchange Commission
- 3.An audit of financial statements is conducted to determined if the
- A.
Overall financial statements are stated in accordance with the applicable financial reporting framework
- B.
Management fraud
- C.
Organization is operating efficiently and effectively
- D.
Auditee is following specific procedures or rules set down by some higher authority
- E.
Client's internal control is functioning as intended
- 4.An audit involves ascertaining the degreee of correspondence between assertions and established criteria. In the case of an audit of financial statements, which of the following would not be a valid criterion?
- A.
International Accounting Standards
- B.
International Financial Reporting Standards
- C.
International Standards on Auditing
- D.
Philippine Accounting Standards
- 5.Most of the independent auditor's work in formulating an opinion on financial statements consists of
- A.
Studying and evaluating internal control
- B.
Obtaining and examining evidential matter
- C.
Examining cash transactions
- D.
Comparing recoded accountability with assets
- 6.An Audit that involves obtaining and ealuating evidence about the efficiency and effectiveness of an entity's operating activities in relations to specified objectives is a(n):
- A.
External Audit
- B.
Compliance Audit
- C.
Operational Audit
- D.
Financial Statement Audit
- 7.In financial statement audits, the audit process should be conducted in accordance with
- A.
The audit program
- B.
International Standards on Auditing
- C.
International Accounting Standards
- D.
International Financial Reporting Standards
- 8.Which of the following best describes the operational audit?
- A.
In requires the constant review by internal auditors of the administrative controls as they relate to operations of the company.
- B.
It concentrates on implementing financial and accounting control in a newly organized company.
- C.
It attempts and is designed to very the fair presentation of a company's results of operations.
- D.
It concentrates on seeking out aspects of operations in which wast would be reduced by the introduction of controls.
- 9.Which of the following types of audit uses laws and regulations as its criteria?
- A.
Operational audit
- B.
Financial statement audit
- C.
Compliance audit
- D.
Performance audit
- 10.A typical objective of an operational audit is to determine whether an entity's
- A.
Internal control structure is adequately operating as designed
- B.
Operational information is in accordance with generally accepted accounting principles.
- C.
Specific operating units are functioning efficiently and effectively.
- D.
Financial statements present fairly the results of operations
- 11.The auditor communicates the results of his/her work throught the medium of the
- A.
Engagement letter
- B.
Audit report
- C.
Management letter
- D.
Financial Statements
- 12.Which of the following types of auditing is performed most commonly by CPA's on contractual basis?
- A.
Internal auditing
- B.
Income tax auditing
- C.
Government auditing
- D.
External auditing
- 13.Independent auditing best described as a
- A.
Professional activity that measures and communicate financial accounting data
- B.
Subset of accounting
- C.
Professional activity that attests to the fair presentation of financial statements
- D.
Regulatory activity that prevents, the issuance of improper financial information
- 14.The overall objective of internal auditing is to
- A.
Attest to the efficiency with which resources are employed.
- B.
Ascertain that controls are cost justified.
- C.
Provide assurance that financial data have been accurately recorded.
- D.
Assist members of the organization in the effective discharge of their responsibilities.
- 15.Internal auditing is an independence appraisal function established within an organization to examine and evaluate its activities. to that end, internal auditing provides assistance to
- A.
External auditors
- B.
Stockholders
- C.
Management and the board of directors
- D.
Government
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