Identification

Question 1

involves examining of records, documents, or tangible asset

Answer 1

inspection

Question 2

consists of looking at a process or procedure being performed by others

Answer 2

Observation

Question 3

consist if seeking/searching appropriate information from knowledgeable persons inside or outside the entity

Answer 3

Inquiry

Question 4

Consists of the analysis or significant ratios ad trends including the resulting investigation of fluctuations and relationships that are inconsistent with other relevant information or deviate from predicted amounts

Answer 4

Analytical Procedures

Question 5

refers to the information obtained by the auditor in arriving at the conclusions.

Answer 5

Audit Evidence

Question 6

the auditor obtains more detailed knowledge about the client’s business industry

Answer 6

Audit Planning

Question 7

it helps the auditor in understanding the transactions and events affecting the financial statements.

Answer 7

Audit Planning

Question 8

affects the reliability of the financial statements.

-It involves obtaining and understanding of the entity’s internal control systems and assessing the level of control risk.

Answer 8

Internal Control

Question 9

one of the primary considerations before accepting an audit engagement is to determine whether the auditor has the necessary skills and competence to handle the engagement.

Answer 9

Competence

Question 10

According to PSA 210, the auditor and the client should agree on the terms of the engagement and the agreed terms will have to be recorded in an engagement letter.

Answer 10

Engagement Letter

Question 11

the auditor’s responsibility is to design the audit to provide reasonable assurance that the financial statements taken as a whole are free from material misstatements.

-refers to the risk that the auditor might give an inappropriate audit opinion on the financial statements.

Answer 11

Audit Risk

Question 12

is the susceptibility of an account

balance or class of transactions to a material misstatement assuming that there were no related internal controls

Answer 12

Inherent risk

Question 13

the risk that material a misstatement that could occur in an account balance or class transactions will not be prevented or detected, and corrected in a timely manner by accounting and internal control system.

Answer 13

Control Risk

Question 14

the risk that an auditor may not detect a material misstatement that exists in an assertion.

Answer 14

Detection Risk

Question 15

overview of a expected scope and conduct of the audit.

Answer 15

Audit Plan

Question 16

the auditor should develop and document an audit program setting out the nature timing and extent of planned audit procedures required to implement the overall audit plan.

-it executes the audit strategy

-it sets out in detail the audit procedures to be performed in each segment of the audit

Answer 16

Audit Program

Question 17

is an estimate of the time that will be spent in executing the audit procedures listed in the audit program.

Answer 17

Time Budget

Question 18

process designed by those charged with governance, management, and other persons provide reasonable assurance about the achievement of the entity’s objectives with regard to reliability of financial reporting.

Answer 18

Internal Control

Question 19

includes the attitude, awareness, and actions of management and those charged with governance concerning the internal control and it’s importance in the entity.

Answer 19

Control Environment

Question 20

are the policies and procedures that help ensure that the management directives are carried out.

Answer 20

Control Activities

Question 21

a process of assessing the quality of internal control performance over time. It involves assessing the design and operation of controls on a timely basis and taking necessary corrective actions

Answer 21

Monitoring

Question 22

involves repeating the activity performed by the cliënt to determine whether proper results were obtained.

Answer 22

Reperformance