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  • Auditing Theory-02

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    Gellie Vale T. Managbanag
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    AUDITING THEORY-02

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    2 Ansichten2 Seiten

    Auditing Theory-02

    Hochgeladen von

    Gellie Vale T. Managbanag

    Copyright:

    © All Rights Reserved
    Als PDF herunterladen oder online auf Scribd lesen
    Markieren Sie unangemessene Inhalte
    von 2
    ~AUDITING THEORY en Jose M. Ireneo - George R. James AT-02: FINANCIAL $1 ‘ATEMENT AUDIT REQUIRED READINGS: Chapter 2, Auditing and Assurance Principles, 12" Edition (Ireneo, Ireneo, James) FSA 200 (Revised and Redrafted) ~ Overall Objectives of the Independent Auditor and the Conduct of an ‘Audit in Accordance with Philippine Standards on Auditing PSA Glossary of Terms 1, A structured representation of historical financial information, including related notes, intended to communicate an entity's economic resources or obligations at @ point in time or the changes therein for a period of time in accordance with a financial reporting framework ‘A. Annual report Accounting records B. Engagement documentation B® Financial statements 2. The criteria for evaluating quantitative information vary. For example, in the audit of historical financial statements by CPA firms, the criteria are usually (PERS or GAAP. C. National Internal Revenue Code B. PSAs OD. SEC Circulars 3. Which of the following parties is responsible for an entity’s financial statements? £ Those charged with governance and entity management, . The external audit team. C. The partner who signs the audit report. D. The Philippine Securities and Exchange Commission, 4 This term describes the role of person(s) or organization(s) with responsibility for overseeingsthe ye gy strategic direction of the entity and obligations related to the accountabilty of the entity. _ 4 Ndi, "X covernance C. Control environment a ‘8. Augit committee D. Management ‘nopelny on 5. This comprises officers and others who also perform senior managerial functions, and inch directors and the audit committee only in those instances when they perform such functions. A. Top rank personnel C, Board of directors B. Those charged with governance Bi Management 6. An operating committee of a company's board of directors that Is in charge of overseeing financial reporting and disclosure. A, Governance .Contro! environment FE Audit committee 676 cate of Garernance 1D. Management 7. Identify the concept: “A client's financial statements may be materially false and/or misleading.” A, Business risk. CC. Giient risk, BH Information risk. D. Risk assessment. 8. Which of the following methods is most commonly used to reduce information risk? A. Allow users to verify information 8, Users share information risk with management. ZF Have the financial statements audited. D. Allow all users to prepare the statements, 9. The following are conditions that create a demand fror financial information: A. + Transactions that are numerous and complex. 8B. Users separated from accounting records by distance and time. Financial decisions that are important to investors and users. FP Ailof the choices are examples of the said conditions. IM users for assurance on reliability of 10, Which of the following best describes the reason why ind fi erie sea 'y independent auditors report on financial A.A management fraud may exist and it is more {i A tien lore likely to be detected by independent A poorly designed internal control struct AA misstatement of account balances may exist dev the independent auditor's work, Sn tec epteniasitheres ee B. c . Different interests may exist between the company preparir ments Face awe ay et ae reat toa siete and i ture may be in existence. 4 meecnetsoceume te: al Statement Aualits AT-02 AL. The best statement of the res statements is: ‘A. The auditor's responsibilty on fair presentation of financial statements is limited only up to the date of the audit report F_ The auditor's responsiailty is confined to his expression of opinion about the audited Statements The responsibility over the financial statements rests with the management and the auditor gssumes responsibility with respect to the notes of financial statement Q._ The auditor is responsible only to his qualified opinion but not for any other type of opinion. 12, The general principles for conducting financial statement audits include which of the following? ‘A. “Compliance with the Code of Ethics for CPAs. 8. Compliance with Philippine Standards on Auditing S. Planning and performing the audit with protessicnal skepticism @. allof the choices apply POnsibility Of the auditor with respect to audited financial 13. Philippine Standards on Auditing (PSAs) should be ‘ooked upon by practitioners 35 A. Ideals to strive for, but which are not achievable ao B. Maximum standards wnich denote excellent work. pees conte C, “Benchmark to be used on all audits, reviews, ard compilations.

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