Settlement of Audit Objections
When an independent auditor decides that the work performed by internal auditors may have bearing on the nature, timing and extent of planned audit procedures, the independent auditor should evaluate objectivity of the internal auditor. The most important factor influencing it would be:
organizational level to which he reports
qualification of internal auditor
system of quality control of his work
all of the above
organizational level to which he reports
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The risk of management fraud increases in the presence of :A. Frequent changes in supplies
B. Improved internal control system
C. Substantial increases in sales
D. Management incentive system based on sales done in a quarter
Concurrent audit is a part of:
A. internal check system
B. continuous audit
C. internal audit system
D. final audit
Which of the following controls would ensure that securities are not lost, stolen or diverted:
A. Establish physical barriers over investment securities
B. Maintain files of authorized signatures
C. Segregate investment approval form accounting and from custody of securities
D. All of the above
An auditor conducts a surprise check on the pay day (i.e.) the day wages and salaries are paid. The primary purpose of this audit procedures is:
A. To ensure that there are not ghost workers
B. To test procedures for distributing pay cheques
C. Both A and B
D. None of these
A company auditor can be removed by:
A. board of directors
B. managing director
C. any director
D. general meeting
Which one of the following primary assertions is satisfied when an auditor ensures that there are no unrecorded assets liabilities transactions or events or undisclosed items in the client financial records:
A. Valuation
B. Completeness
C. Existence
D. Rights and obligations
Following descriptions are the examples of substantive testing EXCEPT:
A. Test of account balances to verify the correctness of the amounts
B. Verification that an operating system and/or applications are configured appropriately to the companies needs
C. Review of minutes of directors; meetings and inquiry
D. Use of statistical sampling to determine the accuracy of financial statement figures
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