Question Two; (24 marks)

Select the most appropriate to the following sentences:-

1.All of the following are examples of assurance services ,except:

a.Financial engagement b. Compliance engagement.

c. Due diligences engagement d. Training engagement,

2. The major purpose of analytical procedures in the audits could be:

a.To perform additional audit procedures.

b.To plan audit engagement c.To obtain audit evidence,

d.To study relationships among financial statement elements

3.Assurance services to elders includes :

a. Receiving elders incomes b.Paying elders bills

c.Periodic reporting about the quality of the care provided to elders,

d. consulting services to elders.

4. One of the following most likely represents a weakness in internal control of an IT system:-

a.The systems analyst reviews output and controls distribution of output from the IT department.

b.The accounts payable clerks prepares data for data processing and enters the data into the computer.

c.The system programmer designs the operating and control functions of the programs and participates in testing operating systems.

d. The control clerk establishes control over data received by the IT department and reconciles control totals after processing.

5) As lower accepted levels of both audit risk and materiality are established, the auditor should plan more work on individual accounts to:

a-Find smaller errors. B- Find larger errors.

c- Increase the tolerable error in the accounts

d- Decrease the risk of overreliance.

6)An Assurance report on information can provide assurance about the informations quality ,except for :

a-Reliability b-Relevance c-Durability d-Timeliness

7)Why does the auditor obtain an understanding of the entity and its environment:

a-To determine the audit fee.

b- To decide the facts about the entity to include in the audit report.

c- To plan the audit and determine and determine the scope of of audit procedures to be performed.

d-To limit audit risk to a lowest level.

8)One of the following is not a Web Trust principle:-

a-Transaction Integrity b-Information Protection

c-Digital certificate authorization d-Business practices disclosure

9) SQCS No.1 identifies one of the following elements for quality control:

a- Independence, integrity ,and objectivity .

b-Personal management

c-Engagement performance and monitoring

d-All of the above

10)Tech Company has disclosed an uncertainty due to pending litigation. The auditor decides to issue a qualified opinion due to :

a-Lack of sufficient evidence b-Inability to estimate the amount of loss.

c-Entity's lack of experience with such litigation.

d-Lack of insurance coverage for possible losses from such litigation.

11)One of the following audit procedures is most likely to assist an auditor in identifying conditions and events that may indicate substantial doubt about an entity's ability to continue as a going concern:

a.Review Compliance with the terms of debt agreement.

b.Confirm accounts receivable form principal customers.

c.Reconcile interest expense with outstanding debt. d.Confirm bank balances.

12)An auditor would be most likely to identify contingent liability by obtaining :-

a.Accounts payable confirmation b.Transfer agent confirmation

c. Standard bank confirmation d.Related Party transaction confirmation