Which one of the following may auditors NOT perform for their client?

Related Mcqs:

1. Which of the following are you unlikely to see in the current file of auditors’ working papers?

   A. Memorandum & articles of association
   B. Audit planning memorandum
   C. Summary of unadjusted errors
   D. Details of the work done on the inventory count

2. Which of the following does NOT belong in the auditors’ report?

   A. Introductory paragraph specifying the pages to which the report relates and the accounting convention adopted
   B. Basis of the opinion
   C. Involvement of any specialist
   D. Statement of responsibilities of directors and auditors

3. Why do auditors concentrate their efforts on material items in accounts?

   A. Because they are easier to audit
   B. Because it reduces the audit time
   C. Because the risk to the accounts of their being incorrectly stated is greater
   D. Because the directors have asked for it

4. When restrictions that significantly affect the scope of the audit are imposed by the client, the auditor generally should issue which of the following opinion?

   A. Qualified opinion
   B. Disclaimer of opinion
   C. Adverse opinion
   D. Unqualified report with ‘an emphasis of matter’ paragraph;

5. The client changed method of depreciation from straight line to written down value method. This has been disclosed as a note to the financial statements. It has an immaterial effect on the current financial statements. It is expected, however, that the change will have a significant effect on future periods. Which of the following option should the auditor express?

   A. Unqualified opinion
   B. Qualified opinion
   C. Disclaimer of opinion
   D. Adverse opinion

6. An auditor should not accept a loan on favourable commercial terms from an audit client because of the threat to his or her independence. The threat would be a___________?

   A. Self-interest threat
   B. Self-review threat
   C. Advocacy threat
   D. Familiarity threat

7. Which of the following should NOT be considered at the planning stage?

   A. The timing of the audit
   B. Analytical review
   C. Last year’s written representation letter
   D. Obtaining written representations

8. Which of the following documents is not relevant for vouching cash sales?

   A. Daily cash sales summary
   B. Salesmen’s summary
   C. Monthly statements sent to customers
   D. Bank statement

9. Which of the following statements is correct?

   A. When a company negotiates a ‘friendly’ takeover, it usually appoints a firm of accountants to carry out due diligence on the takeover target.
   B. In an attestation engagement, the accountant is required to report on the quality of work performed.
   C. In a review engagement, evidence is gathered mainly by means of computation and inspection.
   D. In an engagement to review financial statements, the amount of work required is the same as for an audit

10. Which of the following statements is INCORRECT?

    A. An auditor may serve on the board of directors of an audit client.
    B. An auditor who is an immediate family member of the director of an audit client must not be assigned to the audit team.
    C. Purchasing goods from an audit client on normal commercial terms does not create a threat to the auditor’s independence.
    D. An auditor who was recently a director of an audit client must not be assigned to the audit team for that client.