Semi-Final Examination - ASUPRIN Refreshers AY 23-24

Name

Section Code

1. The auditor faces a risk that the audit will not detect material misstatements in the financial statements. In regard to minimizing the risk, the auditor primarily relies on:

• A. Substantive procedures.
• B. Tests of controls.
• C. Internal control.
• D. Statistical analysis.

2. When planning an audit, an auditor should:

• A. Consider whether the extent of substantive procedures may be reduced based on the results of the internal control questionnaire.
• B. Make preliminary judgments about materiality levels for audit purposes.
• C. Conclude whether changes in compliance with prescribed control procedures justifies reliance on them.
• D. Prepare a preliminary draft of the management presentation letter.

3. Which of the following is least likely to be required on an audit?

• A. Evaluate the business rationale for significant, unusual transactions.
• B. Make a legal determination of whether fraud has occurred.
• C. Review accounting estimates for biases.
• D. Test appropriateness of journal entries and adjustments.

4. An auditor who accepts an audit engagement and does not possess the industry expertise of the business entity, should:

• A. Engage financial experts familiar with the nature of the business entity.
• B. Obtain knowledge of matters that relate to the nature of the entity’s business.
• C. Refers a substantial portion of the audit to another CPA who will act as the principal author.
• D. First inform management that an unqualified opinion cannot be issued.

5. If a short-term note payable is included in the accounts payable balance on the financial statement, there is a violation of the:

• A. completeness assertion.
• B. cutoff assertion.
• C. existence assertion.
• D. classification and understandability assertion.

6. A proposed auditor makes specific inquiries of the previous auditor, prior to engagement acceptance, to

• A. Have knowledge whether PFRS has been consistently applied
• B. Inquire or significant subsequent events with respect to the prior period
• C. Gain understanding on the reasons for the change of auditor
• D. Compare audit fees

7. Communication with a predecessor auditor is initiated by:

• A. Management
• B. The audit committee of the board of directors
• C. The successor auditor
• D. The chair of the board of directors

8. Which of the following should an auditor obtain from the previous auditor prior to accepting an audit engagement?

• A. Analysis of balance sheet accounts.
• B. Analysis of income statement accounts.
• C. All matters of continuing accounting significance.
• D. Facts that might bear on the integrity of managements.