Multiple Choice (4% of your Grade)

Instructions: Please select and clearly mark the correct answer by using bold or highlighting the passage. This part of the assignment is worth 4% of our grade. Each question is worth 1 mark. Incorrect answers will be marked at 0. Please submit the file as a .pdf.

1. A limitation of an audit is caused by

a) the nature of financial reporting.

b) the nature of audit procedures.

c) the need for the audit to be conducted within a reasonable period of time and at a reasonable cost.

d) all of these answers are correct

2. Vera Sobczyk spent a week at a clients wholesale operation determining whether the

clients remittances to the tax authorities were in accordance with tax regulations. This is an

example of a(n)

a) taxes payable mandate.

b) financial audit.

c) operational audit.

d) compliance audit.

3. The wording of a limited assurance engagement expresses a conclusion that generally states

a) there is nothing wrong with the subject matter.

b) there is something wrong with the subject matter.

c) there is nothing that has come to the attention of the auditors that would lead them to believe that the information being assured is not true and fair.

d) there is something that has come to the attention of the auditors that would lead them to believe that the information being assured is not true and fair.

4. An unqualified opinion is also known as a(n)

a) clean opinion.

b) adverse opinion.

c) unmodified opinion.

d) both clean opinion and unmodified opinion.

5. For a financial report to be reliable, it must

a) be free from material misstatement.

b) have an impact on the decisions made by users regarding the performance of the entity.

c) be periodically audited by an independent auditor.

d) be reviewed by an internal auditor

6. Objectivity refers to the obligation that all members of the professional bodies

a) be straightforward and honest.

b) refrain from disclosing information to people outside of their workplace that is learned as a result of their employment.

c) not allow their personal feelings or prejudices to influence their professional judgment.

d) ensure that they do not harm the reputation of the accounting profession.

7. Qualities associated with professional skepticism include all of the following except

a) withholding judgement until appropriate evidence is gathered

b) trust in managements ability to make appropriate estimates

c) tendency to inquire

d) self-confidence to challenge assumptions

8. When Jeffrey Bona, CPA tried to collect last years audit fees, he was told that he

would receive the fees for the previous year and the current year upon finishing this years work

and issuing a clean audit opinion. This was non-negotiable and he was told that if he did not

want to go along with it, the client would get another auditor. When he decided to leave his

client, what threat to his independence did he mitigate?

a) self-interest threat

b) self-review threat

c) advocacy threat

d) intimidation threat

9. Having policies and procedures to ensure the quality of an assurance engagement is an

example of a safeguard to independence created by

a) the client's audit committee.

b) the Canada Business Corporations Act.

c) the client's board of directors.

d) the accounting firm.

10. The relationship between the external and internal auditor can be described as

a) the internal audit function is separate and independent of the external audit.

b) the external auditor can review the effectiveness of the internal audit function to modify the nature and timing of audit testing.

c) the external auditor relies solely on the internal auditors reports.

d) non-existent. Under no circumstances can the external auditor rely on any work of the internal audit function.

NOTE :

please give also reference and also explanation