PSA 200

Question 1

What is the purpose of the audit?

Answer 1

To enhance the degree of confidence of intended user in the FS

Question 2

It is obtained when the auditor has obtained sufficient appropriate audit evidence to reduce audit risk to an acceptably low level

Answer 2

Reasonable assurance

Question 3

Is the auditor responsible for the detection of misstatements that are not material to the FS as a whole?

Answer 3

No

Question 4

If the reasonable assurance cannot be obtained and qualified opinion is insufficient,

Answer 4

The PSAs require that the auditor disclaim an opinion or withdraw from the engagement

Question 5

Audit evidence is

Answer 5

An information used by the auditor in arriving at the conclusions on which the auditor’s opinion is based

Question 6

An example of the auditor’s opinion that gives no assurance

Answer 6

The future viability of the entity nor the efficiency or effectiveness with which management has conducted the affaira of the entity

Question 7

In preparing the FS,

Answer 7

The management requires to exercise judgment in making accounting estimates that are reasonable in the circumstances, as well as to select and apply appropriate accounting policies

Question 8

If there is a conflict exist between the financial reporting framework and the sources from which the direction on its application may be obtained, which one shall prevail?

Answer 8

The highest authority

Question 9

In case of doubt about the reliability of information or indications of possible fraud,

Answer 9

The PSAs require that the auditor investigate further and determine what modifications or additions to audit procedures are necessary to resolve the matter

Question 10

What should an experience auditor, having no previous connection with the audit, do?

Answer 10

Should ask the senior auditor to prepare for the audit documentation sufficient to understand the significant professional judgments made in reaching conclusions on significant matters

Question 11

It is cumulative in nature and is primarily obtained from audit procedures performed during the course of the audit

Answer 11

Audit evidence

Question 12

If the management refuse to present any financial information to the auditor, can it still be considered as audit evidence?

Answer 12

Yes

Question 13

It is applied by the auditor both in planning and performing audit, and in evaluating the effect of identified misstatements

Answer 13

Concept of Materiality

Question 14

It could reasonably be expected to influence the economic decisions of users taken on the basis of the FS

Answer 14

Misstatement

Question 15

Judgements about materiality are

Answer 15

Made in the light of surrounding circumstances, and are affected by the auditor’s perception of the financial information, and by the size or nature of a misstatement or both

Question 16

How to obtain sufficient appropriate audit evidence about whether material misstatement exists?

Answer 16

Through designing and implementing appropriate responses to the assessed risk

Question 17

It includes both information contained in the accounting records underlying the financial statements and other information

Answer 17

Audit evidence

Question 18

It is the measure of the quantity of audit evidence

Answer 18

Sufficiency of audit evidence

Question 19

It is the measure of the quality of audit evidence

Answer 19

Appropriateness of audit evidence

Question 20

It is affected by the auditor’s assessment of the risks of material misstatement and also by the quality of such audit evidence

Answer 20

Quantity of the audit evidence

Question 21

Appropriateness if audit evidence is

Answer 21

Its relevance and its reliability in providing support for the conclusions on which the auditor’s opinion is based

Question 22

It is the result of the procedures made by the auditor to reduce audit risk

Answer 22

Detection risk

Question 23

Audit risk is

Answer 23

A risk that the auditor expresses an inappropriate audit opinion when the FS are materially misstated

Question 24

Professional judgment

Answer 24

The application of relevant training, knowledge and experience, within the context provided by auditing

Question 25

A high, but not absolute, level of assurance

Answer 25

Reasonable Assurance

Question 26

The susceptibility of an assertion before consideration of any related controls

Answer 26

Inherent risk

Question 27

Overseeing the strategic direction of the entity and obligations related to the accountability of the entity

Answer 27

Those charged with governance

Question 28

A misstatement that could occur in an assertion that will not be prevented, or detected and corrected, on a timely basis by the entity’s internal control

Answer 28

Control risk

Question 29

To obtain reasonable assurance

Answer 29

The auditor shall obtain sufficient appropriate audit evidence to reduce the risk to an acceptably low level and thereby enable the auditor to draw reasonable conclusions

Question 30

If an objective in a relevant PSA cannot be achieved

Answer 30

The auditor shall evaluate whether this prevents the auditor from achieving the overall objectives

Question 31

It is not used as the justification for decisions that are not otherwise supported by the facts and circumstances of the engagement ot sufficient appropriate audit evidence

Answer 31

Professional judgment

Question 32

It is influence by its source and its nature, and is dependent on th3 individual circumstances under which it is obtained

Answer 32

Reliability of evidence

Question 33

Detection risk

Answer 33

The greater the risks of material misstatement the auditor believes, the less it can be accepted and the more persuasive it is

Question 34

Inherent limitations of an audit

Answer 34

The auditor is not expected to, and cannot, reduce audit risk to zero and cannot therefore obtain absolute assurance the the FS are free from matieral misstatement

Question 35

It is not an official investigation into alleged wrongdoing

Answer 35

Audit; therefore the auditor is not given special powers to search (as for investigating)