Question 5 of 45

According to the Financial Reporting Council (FRC), when is the culture of an audit firm likely to provide a positive contribution to audit quality?

When the leadership of the audit firm ensures robust systems for client acceptance and continuation based on the likelihood of increased audit fees.

When the leadership of the audit firm ensures financial considerations drive actions.

When the leadership of the audit firm creates an environment where achieving efficiency is valued, invested in and rewarded.

When the audit firm has multinational experience in conducting audits.

When the leadership of the audit firm ensures partners and other staff have sufficient time and resources to deal with difficult issues as they arise.

Question 6 of 45

Which one of the following statements is true?

Even though all audits are different, they can all be approached in the same manner.

Appropriateness deals with the quantity of evidence the auditor collects, whereas sufficiency deals with the quality of evidence the auditor collects.

Liabilities and expenses are most often tested for overstatements.

Underlying accounting records consist of evidence of controls as well as supporting records such as checks, invoices, the general and subsidiary ledger and journal entries.

The client's verbal evidence is more reliable than evidence from independent outside sources.