Tag: Auditors

In any assurance engagement there are three parties involved: the responsible party, the practitioner and the user.

In respect of given subject matter state which party:

Determines the suitable criteria?

Select ONE answer:

1. User
2. Practitioner
3. Responsible party
4. The Shareholder

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == >    It is the responsible party who will determine the suitable criteria (in response to the obligations it has) against which the practitioner will test the subject matter and on which the practitioner will report to the users.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following is NOT a limitation of the provision of assurance?

Select ONE answer:

1. Unqualified staff may be used on assurance engagements
2. Sampling is used in assurance work
3. Client systems have inherent limitations
4. The auditor will not check all transactions

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct == > The use of unqualified staff increases the detection risk of the auditor as opposed to being an inherent limitation of the provision of assurance. Work carried out by less qualified staff should always be supervised, directed and reviewed by more senior personnel.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following is NOT a limitation of the provision of assurance?

Select ONE answer:

1. Sampling is used in assurance work
2. Assurance work is carried out by people independent of the entity
3. Client systems have inherent limitations
4. The auditor will not check all transactions

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > The fact that assurance work is carried out by independent people is a strength of assurance provision. Option 4 is also incorrect as the use of unqualified staff increases the detection risk of the auditor as opposed to being an inherent limitation of the provision of assurance. Work carried out by less qualified staff should always be supervised, directed and reviewed by more senior personnel.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which one of the following qualifications is required for individuals working on audits in the UK?

Select ONE answer:

1. University degree
2. Professional qualification
3. Membership of a recognised supervisory body
4. Employment by a firm controlled by qualified persons

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > Employment by a firm controlled by qualified persons. Membership of a recognised supervisory body cannot be obtained until exams have been passed, but provided that the person is employed by a qualifying person/firm, work can be carried out on audits.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following does NOT describe aspects of the expectations gap with respect to the external audit?

Select ONE answer:

1. Users do not understand the meaning of the audit opinion
2. Users are not aware of the limitations of the audit process
3. Users do not appreciate that reasonable assurance is a low level of assurance
4. Users do not understand what the audit process involves

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == >    Reasonable assurance is a high, but not absolute, level of assurance.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.