The following are the qualifications of internal auditor the external auditor needs to consider before relying on their work, except

a. Objectivity

b. Scope of function

c. Efficiency

d. Due Care

When an auditor intends to use the work of an expert in an audit engagement:

(1) He should refer to the work of the expert in his report to indicate the division of responsibility.

(2) He does not perform additional procedures since the expert's report constitutes sufficient audit evidence.

(3) He is not concerned with the objectivity of the expert.

(4) He simply relies on the expert's assumptions and methods.

a. All of the above statements are true.

b. Only statements (1) and (3) are true.

c. Only statements (2) and (4) are true.

d. All of the above statements are false.

Which of the following statements is not true?

a. Test of transactions are often performed several months prior to the balance sheet date.

b. It is common to use analytical procedures at any time during the audit.

c. When controls are not considered effective, or when control deviations are discovered, substantive tests will be eliminated and replaced with tests of details and balances.

d. Tests of details of balances are normally done last.

When planning tests of details of balances, the auditor forecasts the results of tests of controls, substantive tests of transactions and analytical procedures. The prediction for these three areas is usually there will be

a. No exceptions.

b. Few or no exceptions.

c. An average number of exceptions.

d. Many exceptions.

The independent auditor acquires an understanding of the internal audit function as it relates to the independent auditor's study and evaluation of internal accounting controls because

a. The auditor programs, working papers, and reports of internal auditors can be often used as a substitute for the work of the independent auditor's staff.

b. The procedures performed by the internal audit staff may eliminate the independent auditor's need for an exclusive study and evaluation of internal control.

c. The work performed by internal auditors may be a factor in determining the nature, timing and extent of the independent auditor's procedures.

d. The understanding of the internal audit function is an important substantive test to be performed by the independent auditor.

Which one of these is not a type of evidence that would be used for both obtaining an understanding of the control structure and testing the controls?

a. Inquiries.

b. Inspection.

c. Observation.

d. Reperformance.

With the adoption of PAS which are IAS-based, the measurements and disclosures on fair value have become prevalent in financial reporting framework. In which of the following will fair value measurement not apply?

a. Investment in Trading Securities.

b. Investment in Held-to-Maturity Securities

c. Investment in Available-for-Sale Securities

d. Liabilities to settle an obligation under a financial instrument, "market to market".