Exam 4: Audit Responsibilities and Objectives

Which of the following is NOT one of the five broad categories of assertions, as adapted from ASA 315?

'All assets, liabilities and equity interests that should have been recorded have been recorded' relates to which management assertion?

The auditor's BEST defence when existing material misstatements in the financial statements are NOT uncovered in the audit is that:

What is the first step to developing audit objectives?

The responsibility of management includes:

Although management has the responsibility for the preparation of the financial statements and the accompanying notes, it is acceptable for an auditor to draft the financial statements for the client or to offer suggestions for clarification.

Which of the following is NOT a responsibility of management?

To adequately plan the appropriate audit evidence, generally accepted auditing standards require the auditor to gain an understanding of the internal control structure. This understanding is obtained by:

Analytical procedures are those that:

If the auditor was responsible for making certain that all the assertions of management in the statements were correct:

An auditor should recognise that the application of auditing procedures may produce evidential matter indicating the possibility of errors or fraud and therefore should:

If the auditor has obtained a reasonable level of assurance about the fair presentation of the financial statements through understanding internal control, assessing control risk, testing controls and analytical procedures, then the auditor:

The accuracy of information included in footnotes that accompany the audited financial statements of a company whose shares are traded on a stock exchange is the primary responsibility of:

When using the cycle approach to segmenting the audit, the reason for treating capital acquisition and repayment separately from the acquisition of goods and services is that:

Tests of details of balances are specific procedures intended to:

Reasonable assurance is:

In describing the cycle approach to segmenting an audit, which of the following statements is NOT true?

'The auditor should not assume that management is dishonest, but the possibility of dishonesty must be considered.' This is an example of:

The broad categories of management assertions listed in ASA 315 may be grouped together under five headings. One heading is 'existence or occurrence.' Assertions about existence deal with whether assets, liabilities and equities included in the balance sheet actually existed on the balance sheet date. Assertions about occurrence deal with whether recorded transactions reflected in the income statement actually occurred during the accounting period. Identify and discuss each of the remaining four categories or headings of management assertions.

The auditor's BEST defence when material misstatements are NOT uncovered in the audit is that: