ACC411
1. The purpose of audit review is to check whether:
The nature and scope of conclusions from consultations undertaken
Detect fraud and punish the offender
Compliance procedure is followed
The audit work was carried out to proper professional standard
2. The internal misrepresentation of financial information, where financial information that do not reflect the economic reality of the transactions and events that took place within the reporting period is referred to as……..
Misappropriation of assets
Using assets for personal use
Fraudulent financial reporting
Error
3. International Standards on Auditing (ISAS) is applied when.
there is a compilation of engagement
In review of historical financial information
There is agreement upon procedures to information and others related services engagements
In the audit of historical financial information
4. The stage in money laundering where there is a seperation of illegally obtained money from its source throuh a series of financial transactions that makes it difficult to trace the origin is :
Placement
Layering
Transfering
Intergration
5. All of the following are common areas of expection gap of auditors except:
Professional indemnity gap
Giving an opinion on the fairness of financial statement
Issuing opinion on the companies going concern status
Giving opinion on the companies internal control
6. An act of omission which occurs because the person concerned failed to exercise that degree of reasonable skills and care which is reasonably to be expected in the circumstances of the case is referred to as?
Duty of care
The breach of duty of care
Auditors weakness
Negligence
7. One of these is not a potential threat to independence and objectivity of auditor.
Self interest threat
Self review threat
Familiarity threat
Appearance threat
8. One of the following is not the strategy used by auditors to avoid litigation.
Compliance
Quality control
Professional indemnity insurance
Disclamers
9. In a case laws in which an auditor was guity of misfeasance and thus jointly and severally liable with the directors in respect of two dividends declared, amounting to the sum of 14,400 pounds, on the ground that he ought to have reported the true facts to the shareholders is the case of……….
Re London and general bank (1895)
Re kingston cotton mill (1896)
Mckesson and Robbins (1939)
Re thomas gerrard and son (1968)
10. The advantage of out-of-court settlement is that:
It may encourage others to take action against auditors
Insurance premiums may rise
It involve cost and time
It may avoid adverse publicity for the auditor
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