Settlement of Audit Objections

To help to corroborate the conclusions drawn from individual components of financial statements

To reduce specific detection risk

To direct attention to potential risk areas

To satisfy doubts when questions arise about a client’s ability to continue

sales book and sales return book

purchase book and sales return book

cash book and purchase book

Sales book and purchase return book

Measure of performance

Audit principles

Acts to be performed

Audit judgments

a flowchart of the internal controls

Organization charts

a copy of financial statements

copies of bond and debentures

To report on financial statements

To check accounting system and internal control are operating efficiently

To determine the accuracy of financial statement values and disclosures

To establish a control system in the company

The auditor should express an opinion on financial statements.

His opinion is no guarantee to future viability of business

He is responsible for detection and prevention of frauds and errors in financial statements

He should examine whether recognized accounting principle have been consistently

inefficient concern

processing concern

trading concern

manufacturing concern

Evidence of authorization of adjustments to payables ledger

Evidence of review of reconciliation of purchase ledger listing

Evidence of authorization of adjustments to payable ledger control account

Evidence of authorization of adjustments to purchase ledger

Error of omission

Error of commission

Compensating error

Error of principle

Lower the sampling risk greater the sample size

Smaller the tolerable error, greater the sample size

Lower the expected error, smaller the sample size

All are correct