Quiz (August 26, 2021)

Question 1

The reason of an independent auditor in gathering evidence is to detect fraud. T or F?

Answer 1

FALSE

To form an opinion

Question 2

Any information used by the auditor to determine whether the information being audited is stated in accordance with established criteria

Answer 2

EVIDENCE

Question 3

A behavior that requires one to make decisions, analyses or evaluation on the basis of his knowledge, skills, training or experience he possesses in accordance with the standards, laws, regulations or principles of the applicable financial reporting framework

Answer 3

PROFESSIONAL JUDGEMENT

Question 4

A type of audit that examines part of an organization’s procedures and methods for the purpose of evaluating efficiency and
effectiveness

Answer 4

OPERATIONAL AUDIT

Question 5

The final stage in the auditing process

Answer 5

COMMUNICATION OF AUDITOR’S REPORT

Question 6

Assurance provided by the Auditor

Answer 6

REASONABLE ASSURANCE

Question 7

Standards, laws and regulations needed to judge the validity of the assertions

Answer 7

ESTABLISHED CRITERIA

Question 8

An attitude that includes a questioning mind and a critical
assessment of audit evidence.

Answer 8

PROFESSIONAL SKEPTICISM

Question 9

It requires the auditor to make an impartial assessment of all the relevant circumstances in forming a conclusion

Answer 9

OBJECTIVITY

Question 10

Representations made by an entity about economic actions and
events

Answer 10

ASSERTIONS

Question 11

An auditor who usually performs operational audit

Answer 11

INTERNAL AUDITOR

Question 12

It involves a review of an organization’s procedures to determine whether the entity has followed specific procedures, rules or regulations

Answer 12

COMPLIANCE AUDIT

Question 13

The auditor communicates the results of his or her work through the medium of the ________

Answer 13

AUDIT REPORT

Question 14

An increased likelihood that unreliable information will be provided to decision makers

Answer 14

INFORMATION RISK

Question 15

An assessment of entity’s performance, identification of areas for improvements and making recommendations to improve
performance

Answer 15

MANAGEMENT AUDIT

Question 16

The type of auditing performed most commonly by CPAs on a
contractual basis

Answer 16

EXTERNAL AUDITING

Question 17

In determining the primary responsibility of the external auditor for an audit of a company’s financial statements, the auditor owes primary allegiance to the management of the client because the auditor is hired and paid by management. T or F?

Answer 17

FALSE

Question 18

The audit committee has the primary responsibility for the fairness of the representations made in the financial statements. T or F?

Answer 18

FALSE

Question 19

A typical objective of an operational audit is to determine whether an entity’s specific operating units are functioning efficiently and effectively. T or F?

Answer 19

TRUE

Question 20

One of the limitations of an audit is the nature of evidence obtained. T or F?

Answer 20

TRUE.

Question 21

As long as CPA firms are competent, it is not required that they remain unbiased. T or F?

Answer 21

FALSE

Question 22

An audit involves ascertaining the degree of correspondence between assertions and established criteria. In the case of a financial statement audit, the Philippine Standards on Auditing is a valid criterion. T or F?

Answer 22

FALSE

Question 23

When performing an operational audit, the internal audit team must first determine that specific area are developed to define effectiveness. T or F?

Answer 23

TRUE

Question 24

An auditor’s responsibilities for audited financial statements are not confined to the expression of the auditor’s opinion. T or F?

Answer 24

FALSE

Question 25

Although external auditors strive for both validity and relevance of evidence, internal auditors are concerned almost exclusively with validity. T or F?

Answer 25

FALSE