Which of the following statement best describes the understanding with respect to ownership and custody of working papers prepared by an auditor?

Related Mcqs:

1. 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

2. Which of the following factors would least likely affect the quantity and content of an auditor’s working papers

   A. The assessed level of control risk
   B. The possibility of peer review
   C. The nature of auditor’s report
   D. The content of management representation letter

3. The working papers which auditor prepares for financial statements audit are___________?

   A. Evidence for audit conclusions
   B. Owned by the client
   C. Owned by the auditor
   D. Retained in auditor’s office until a change in auditors

4. The current file of the auditor’s working papers, generally, should include____________?

   A. A flowchart of the internal controls
   B. Organisation charts
   C. A copy of financial statements
   D. Copies of bond and debentures

5. The auditor has serious concern about the going concern of the company. It is dependent on company’s obtaining a working capital loan from a bank which has been applied for. The management of the company has made full disclosure of these facts in the notes to the balance sheet. The auditor is satisfied with the level of disclosure. He should issue___________?

   A. unqualified opinion
   B. unqualified opinion with reference to notes to the accounts
   C. qualified opinion
   D. disclaimer of opinion

6. Assuming that it is not the first appointment of the auditor, who is responsible for the appointment of the auditor?

   A. The shareholders in a general meeting
   B. The managing director
   C. The board of directors in a board meeting
   D. The audit committee

7. The term of the auditor ship of first auditor would be from the date of appointment till________?

   A. the conclusion of statutory meeting
   B. the conclusion of first annual general meeting
   C. the conclusion of next annual general meeting
   D. the date of removal

8. The auditor’s permanent working paper file should not normally, include__________?

   A. Extracts from client’s bank statements
   B. Past year’s financial statements
   C. Attorney’s letters
   D. Debt agreements

9. 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

10. For what minimum period should audit working papers be retained by audit firm?

    A. For the time period the entity remains a client of the audit firm.
    B. For a period of ten years
    C. For a period auditor opines them to be useful in servicing the client
    D. For the period the audit firm is in existence.