CA Auditing Principles & Procedures 4

Question 1

An auditor is required to withdraw from an engagement when:

Accepted Answer

Management imposes a scope limitation so severe that a disclaimer is insufficient

Answer

When management imposes a scope limitation so pervasive that even a disclaimer cannot adequately communicate the restriction, withdrawal is necessary.

Question 2

Which procedure would an auditor most likely perform to test the completeness assertion for accounts payable?

Accepted Answer

Searching for unrecorded liabilities by examining subsequent cash disbursements

Answer

Examining cash payments made after year-end helps identify liabilities that existed at year-end but were not recorded — directly testing completeness.

Question 3

The PCAOB standards apply to audits of:

Accepted Answer

Issuers whose securities are registered with the SEC

Answer

PCAOB standards apply to audits of public companies (issuers) that register their securities with the SEC, as established by the Sarbanes-Oxley Act.

Question 4

When an auditor uses the work of a specialist, the auditor must:

Accepted Answer

Evaluate the specialist's competence, objectivity, and reasonableness of findings

Answer

The auditor must assess the specialist's professional competence, independence from the client, and whether the findings are reasonable and consistent with other evidence.

Question 5

In a review engagement, the accountant performs:

Accepted Answer

Primarily inquiry and analytical procedures

Answer

A review provides limited assurance through inquiry of management and analytical procedures, without the extensive testing performed in an audit.

(CA) Chartered Certified Accountant Practice Test

(CA) Chartered Certified Accountant Practice Test

CA Auditing Principles & Procedures 4