Which of the following is NOT an accepted method of selection in sampling?

Related Mcqs:

1. Which of the following describes sampling risk?

   A. The risk of the auditor carrying out a test the wrong way round
   B. The risk of reliance on unsuitable audit evidence
   C. The risk that the sample does not reflect the population
   D. The risk of the auditor reaching the wrong conclusions from testing

2. 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

3. Which one of the following is NOT a duty of the auditor?

   A. Duty to report to the company’s bankers
   B. Duty to report to the members
   C. Duty to sign the audit report
   D. Duty to report on any violation of law

4. 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

5. According to ISA 315, which of the following is NOT an element of the control environment?

   A. Participation of management
   B. Information processing
   C. Commitment to competence
   D. Human resource policies and practices

6. Which of the following is not corroborative evidence?

   A. Minutes of meetings
   B. Confirmations from debtors
   C. Information gathered by auditor through observation
   D. Worksheet supporting consolidated financial statements

7. Which of the following statement is true regarding an auditor’s working papers?

   A. They document the level of independence maintained by the auditor
   B. They should be considered as the principle support for the auditor’s report
   C. They should not contain details regarding weaknesses in the internal control system
   D. They help the auditor to monitor the effectiveness of the audit firm’s quality control

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.