Auditing and Assurance Training Auditing and Assurance Training MCQ 2

Question 1

Which type of audit opinion is issued when financial statements are presented fairly in all material respects but contain a scope limitation that is not pervasive?

Accepted Answer

Qualified opinion

Answer

A qualified opinion is issued when a matter is material but not pervasive, such as a non-pervasive scope limitation.

Question 2

In auditing, what does the term 'inherent risk' refer to?

Accepted Answer

Susceptibility of an assertion to material misstatement before considering controls

Answer

Inherent risk is the susceptibility of an assertion to a material misstatement assuming no related controls exist.

Question 3

Which sampling method gives every item in a population an equal probability of selection?

Accepted Answer

Simple random sampling

Answer

Simple random sampling ensures every item has an equal and independent chance of being selected.

Question 4

What is the primary purpose of analytical procedures performed at the end of an audit?

Accepted Answer

To assess whether financial statements are consistent with the auditor's understanding

Answer

Final analytical procedures help the auditor assess whether the financial statements make sense in light of overall audit findings.

Question 5

Under ISA 265, to whom must significant deficiencies in internal control be communicated?

Accepted Answer

Those charged with governance and management

Answer

ISA 265 requires auditors to communicate significant deficiencies in writing to both those charged with governance and management.

Auditing and Assurance Training Practice Test

Auditing and Assurance Training Practice Test

Auditing and Assurance Training Auditing and Assurance Training MCQ 2