ACC311 – Quiz 01 Fundamentals of Auditing

Fundamentals of Auditing ACC311 Quiz 01Spring Semester 2016Choose the correct/best option from given MCQs and put your answer in tabularForm as drawn above.1. Risk assessment procedures include which one of the following?a. Inquiries of management and others within the entityb. Preparing the audit reportsc. Segregation of dutiesd. Internal control questionnaire development2. Auditors perform risk assessment procedures for which one of the followingpurposes?a. To understand the entity’s businessb. To understand the entity’s accounting systemsc. To understand the entity’s environmentd. To understand the entity’s legal status3. Internal controls are designed to achieve companies objectives in all of the followingareas EXCEPT:a. Safeguarding of assetsb. Reliability of financial reportingc. Reduction of debt financing costsd. Compliance with laws and regulations4. Which one of the following statements is CORRECT with respect to obtaining anunderstanding of a client?a. Auditors are not required to obtain an understanding with their clientsb. Auditors must obtain an understanding only if an audit is to be conductedc. Auditors must obtain an engagement letterd. Auditors must document their understanding of the engagement5. Which one of the following is NOT a factor included in the control environment ofan entity?a. Integrity and ethical valuesb. Risk assessmentc. Commitment to competenced. Organizational structure6. The auditor’s understanding of the client’s internal control system is documented inorder to substantiate which one of the following requirements?a. Compliance with generally accepted auditing standardsb. Conformity of the accounting records with company’s policiesc. Adherence to requirements of management and local legislationsd. The fairness of the financial statement presentation7. Which of the following is one of the most fundamental and effective internalcontrols?a. Increased use of computers for recording accounting transactionsb. Increased reliance on internal auditors to monitor accounting systemsc. Segregation of incompatible duties across several peopled. Having internal auditors report only to the Board of Directors8. Audit procedures are determined by which one of the following authorities?a. Members of the companyb. Auditors themselvesc. Management of the entityd. Appointing authority of the auditor9. Which one of the following is TRUE about Narrative Notes?a. Notes can take up a disproportionate amount of spaceb. Notes are complex way of describing systemsc. Notes is becoming increasingly widely used technique for describing systemsd. Notes portray the flow of document10. An Internal Control Questionnaire (ICQ) should carry the following basic informationEXCEPT:a. The name of the document (ICQ)b. The client to whom it relatesc. The accounting period under reviewd. Evidence of who has filled the document-: The End:-