hitechpathshala

Q. 1

An auditor of a company communicates significant findings from audit with those charged with governance in the company. Which of the statements is false in regard to communication made?

Evaluation of adequacy of communication process is required on part of the auditor.

Planned scope and timing of audit has also to be communicated.

Communication of rationale behind audit procedures is necessary.

Significant difficulties encountered during audit, if any, have to be communicated.

Q. 2

Written representations are: -

Necessary audit evidence

Sufficient appropriate audit evidence

Not audit evidence

Audit evidence depending upon auditor’s professional judgment

Q. 3

Which of the following is false regarding communication of misstatements identified during course of an audit?

The auditor should request those charged with governance for correction of identified misstatements.

The auditor should obtain written representation acknowledging management belief that effect of uncorrected misstatements is material.

The auditor should obtain written representation acknowledging management belief that effect of uncorrected misstatements is immaterial.

The auditor should communicate effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole.

Q. 4

Which of the following is not an example of subsequent event?

Event occurring between date of financial statements and date of auditor’s report.

Event occurring on date of financial statements.

Event occurring after filing audit report with tax authorities. Had such an event been known earlier, auditor would have amended report.

Event occurring during course of performing audit procedures after date of financial statements.

Q. 5

Which of the following is not an example of events or conditions that maycast significant doubt on the entity’s ability to continue as a going concern?

Adverse key financial ratios

Inability to invest in modernisation of plant

Inability to pay creditors on time

Inability to pay salary of staff

AUDIT 7TH

Marks: 5