Saturday Class

Select all the tasks auditor should perform during initial planning stage:

• Discussion with Management regarding purchase of new machinery

• Determination of materiality

• Analytical procedures as a part of substantive testing

• Legal frame work applicable on entity.

In which of the situation stated below, Auditor could make changes in the planning?

• Increase in the size of samples

• Unexpected results from audit evidences obtained

• Need to complete the audit assignment within deadlines

• Pressure from management to change the testing method

What is the correct method for substantive testing?

• Journal entry testing

• Test of details

• Inquiry with management

• Preliminary Analytical procedures

What are the benefits of audit planning?

• Timely resolution of problems

• Reduction in the audit procedures

• Reduction in the detection risk

• Help in deciding Nature, timing & extent of audit procedures

Which assertions dose not applicable for Balance sheet items?

• Completeness

• Valuation

• Cut-off

• Occurrence

Please select the correct steps in Audit execution.

• Planning, Identification of ROMM, respond to risk, reporting

• Identification of ROMM, discussion among audit team, testing, reporting

• Planning, risk & control identification, testing, reporting

• Sampling, Audit planning, testing, reporting

You are auditor of A ltd and during planning stage found deficiency in the audit report of previous auditor, will it affect the audit strategy during the CY?

• Yes

• No

You are auditor of XY Pvt ltd. Is it mandatory to document audit plan in the case of non-listed entity?

• Yes

• No

Please select all the examples of significant risk.

• Risk of Fraud

• Complexity transactions

• Time required to complete the testing

• Transactions with related parties

You are Auditor of Kings ltd., during the audit you noticed that there are discrepancies in revenue recognition and revenue is considered as benchmark for materiality. What should be your next step in this situation?

• Change the materiality

•   Examine the effect of the discrepancies on the revenue and total revenue and if it is significant than change the materiality decided in the planning stage

• Continue with the testing and report in the audit report

• Obtain management representation latter for the discrepancies in revenue