Free Auditing and Assurance Training Fundamentals Questions and Answers

Question 1

In most cases, an auditor should notify the client if they think an understanding has not yet been reached.

Accepted Answer

Decline to accept or perform the audit

Answer

Modify the scope of the audit to reflect an increased risk of material misstatement due to fraud

Answer

Assess the control risk at the maximum level and perform a primarily substantive audit

Answer

Perform the audit with increased professional skepticism

Question 2

Which statement of Philippine Auditing Practices Statements (PAPS) is true?

Accepted Answer

These statements are issued to provide practical assistance to auditors in implementing PSAs or to promote good practice.

Answer

These statements are intended to have the authority of PSAs.

Answer

These are issued to resolve issues relating to PSAs

Answer

These statements are forms of interpretations issued by AASC

Question 3

Reviewing financial statements has the following goals:

Accepted Answer

State whether anything has come to the auditor’s attention that indicates that the financial statements are not presented fairly

Answer

Assist the client in the preparation of the financial statements

Answer

Carry out audit procedures agreed on with the client and other users of report

Answer

Express an opinion on the overall financial statements

Question 4

The most frequent reason for conducting an audit of historical financial statements is to check if the

Accepted Answer

None of these choices

Answer

Organization is operating efficiently and effectively

Answer

Entity is following specific procedures  or rules set down by some higher authority

Answer

Management team is fulfilling its   fiduciary   responsibilities   to shareholders

Question 5

If an auditor has the following opinions, they are not required to follow a particular PSA requirement:

Accepted Answer

Any of the given three choices is correct

Answer

The amount is insignificant

Answer

The requirement of the PSA is impractical to perform

Answer

The requirement of the PSA is impossible to perform

Question 6

Which of the following claims regarding consulting services is untrue?

Accepted Answer

Consulting services ordinarily involve external reporting

Answer

Most CPAs, including those who provide audit and tax services, also provide consulting services to their clients

Answer

Consulting services differ fundamentally from the CPA’s function of attesting to the assertions of other parties.

Answer

The performance of consulting services for audit clients does not, in and of itself, impair the auditor’s independence

Question 7

Auditing procedures are different from auditing standards in that procedures concern:

Accepted Answer

Acts to be performed

Answer

Audit judgements

Answer

Measures of performance

Answer

Audit principles