Q #

Question

Please provide the Answer in this column

1

If performance materiality increases, what impact would it have on the amount of evidence required to be collected during an audit? (2 marks)

2

External auditors are obviously responsible for the audit of the financials. However what is their responsibility for the preparation of the financials? (2 marks)

3

Recalculating the depreciation schedule tests which assertion? (2 marks)

4

How does AASB come up with Canadian Auditing Standards? (2 marks)

5

How can an auditor reduce a clients inherent risk? (2 marks)

6

You are testing inventory. You determined that inventory exists, nothing is missing from inventory, the calculations are done correctly, the valuation of the inventory is done properly, the inventory is also properly classified and presented in the financials. Can you be reasonably certain that the inventory is not materially misstated? Explain? (2 marks)

7

The document which is essentially the contract between the auditor and the client which outlines the responsibilities of each party is called what?

8

One of your audit planning procedures was the ratio analysis. You noted that the debt to assets ratio of your client is 0.3. Is that good? Explain. (2 marks)

9

You have to test cash and PP&E of your client. Both accounts have the same balance at the end of the year: $25 million. In a typical company, which account will you spend more time testing AND WHY?

10

I am an auditor who has to test prepaid expenses. I need to find the list of procedures to perform for as required by the current audit. Where do I look for these procedures? (2 marks)

11

Which of these two procedures is more reliable: 1) you performing an inventory count as a part of testing inventory or 2) you inspecting shipping documents a part of testing sales? Why? (2 marks)