MCQ- Auditing Standards issued by the INTOSAI

Auditing Standards issued by the INTOSAI

1.     In diverse situations that arise in the course of Government auditing

A.     SAI should apply its own judgement

B.     SAI should rely upon the system of internal control

C.     SAI should rely upon legislative enactments

D.    none of the above

2.     Cooperation of audited entities in maintaining and providing access to all relevant data can be achieved

A.     by the system of internal control

B.     by legislative enactments

C.     by the development of adequate information, control, evaluation and reporting systems within the Government

D.    none of the above

3.     Which among the following is a non-audit work

A.     computer processing functions

B.     gathering data without conducting substantial analysis

C.     legal work

D.    evaluation of internal control

4.     Which among the following is incorrect as to the INTOSAI standards

A.     INTOSAI standards are external to the SAI

B.     INTOSAI standards are prescriptive

C.     INTOSAI standards do not have a mandatory application

D.    none of the above

5.     Find out the correct statement

A.     Private sector standards for financial statements auditing promulgated by regulatory bodies is not applicable to Government auditor

B.     Management is responsible for correctness and sufficiency of the form and content of the financial reports

C.     Internal control cannot minimize the risk of errors and irregularities

D.    none of the above

6.     In Auditor should not consider compliance with accounting standards as a definitive proof because

A.     Going beyond the accounting standards is for the auditors judegement

B.     A fair auditor’s opinion goes beyond the limits of consistent application of accounting standards

C.     The auditing standards are no more than the minimum requirements for an auditor’s obligation

D.    All of the above

7.     Which among the following is incorrect w.r.to ‘internal control’

A.     It is the responsibility of the audited entity to develop adequate internal control systems

B.     It is for the audited entity to ensure that probity propriety are observed in decision making

C.     The system of internal controls relieves the auditor from submitting recommendations to the audited entity

D.    none of the above

8.     Which type of audit brings an immediate sanction

A.     preventive audit

B.     a posteriori audit

C.     a priori audit

D.    none of the above

9.     The general standards of INTOSAI prescribe that the SAI should establish systems and procedures to

A.     conform that internal quality assurance processes have operated satisfactorily

B.     ensure quality of audit report

C.     secure improvements and avoid repetition of weaknesses

D.    All of the above

10. The close link between the legislative body and the SAI can be achieved by

A.     Budgetary enquiry

B.     technical assistance to the work of parliamentary committees

C.     giving members of the legislature factual briefing on audit reports

D.    All of the above

11. All adequate degree of independence of SAI from both legislature and executive is essential to

A.     to the conduct of audit and to the credibility of it results

B.     to obtain sufficient resources from the legislature for which the SAI is accountable

C.     to advise the executive in such matters as accounting standards and policies

D.    none of the above

12. The term ‘competence’ that the auditor and the SAI must possess includes

A.     duty of forming and reporting audit opinions, conclusions and recommendations

B.     Discussion within the SAI to promote the objectivity and authority of opinions and decisions

C.     Equipping itself with the full range of up-to-date audit methodologies

D.    All of the above

13. The field standards applicable to all types of audit does not include

A.     an audit of high quality is carried out

B.     Including all significant instances of non-compliance in the report

C.     The auditor should study and evaluate the reliability of internal control

D.    The auditor should obtain competent, relevant and reasonable evidence

14. In case of regularity (compliance)audit the study and evaluation of internal control is made on

A.     Controls that assist in safeguarding assets and resources

B.     controls that assist management in complying with laws and regulations

C.     Controls that assist in conducting the business of the audited entity

D.    none of the above

15. The form and content of all audit opinions and reports does not include

A.     the reference to the objectives and scope of audit

B.     identification of the legislation or other authority providing for the audit

C.     confidential or sensitive material in the same report

D.    none of the above

16. The SAI should comply with the INTOSAI Auditing Standards in all matters that are deemed material. A matter is considered material if

A.     In general terms, a matter may be judged material if knowledge of it would be likely to influence the user of the audit report.

B.     Materiality is often considered in terms of value but the inherent nature of an item or a group of items may also render a matter material as for example mandatory disclosure requirements of statutes regardless of the amounts involved.

C.     A matter may be material because of the context in which it occurs, for example, considering an item relating to (a) The overall view given to the financial information; (b) The total of which it forms a part; (c) Associated terms (d) The corresponding amount in previous years

D.    All of the above

17. When there is uncertainty affecting financial statements

A.     the auditor may not be able to express an unqualified opinion

B.     a disclaimer is given

C.     an adverse opinion is given

D.    none of the above

18. Find out the incorrect statement

A.     Performance report may be free standing

B.     Performance audit is more open to judgement and interpretation

C.     Reports on irregularities may not be prepared irrespective of a qualification of the auditors opinion

D.    none of the abve

19. The overall objectives of the auditor in conducting an audit of financial statement is

A.     To obtain reasonable assurance about whether the financial statements as a whole are free from instatement

B.     to express an opinion on whether the financial statements are prepared in a accordance with an applicable financial reporting framework

C.     To report on the financial statements, and communicate in accordance with the auditor’s findings

D.    All of the above

20. Name the type of audit carried out in environments where compliance with authorities is the main focus

A.     It is a compliance audit

B.     It is a Regulatory audit

C.     It is a Performance audit

D.    none of the above

21. The financial reporting provisions established by an internal funding organization is

A.     General purpose frame works

B.     special purpose frame works

C.     Neither (a) or (b)

D.    none of the above

22. An audit of financial statements is

A.     an assurance engagement

B.     assertion-based engagement

C.     attestation engagement

D.    none of the above

23. Performance materiality is determined for the purpose of

A.     assessing the risks of material misstatement

B.     determining the nature, timing and extent of further audit procedures

C.     both (a) & (b)

D.    none of the above

24. In an audit of special purpose financial statements, the auditor should obtain an understanding of

A.     The purpose for which the financial statements are prepared

B.     The intended users

C.     The steps taken by management to determine that the applicable financial reporting frame work is acceptable

D.    All of the above

25. Match the following w.r.t. performance auditing approaches

(A) a system-oriented approach	(A) assesses whether the outcome objectives have been achieved as intended
(B) a result-oriented approach	(B) examines, verifies and analysis the causes of particular problems or deviations from criteria
(C) a problem-oriented approach	(C) examines the proper functioning of Management systems especially financial management systems

A.     A-A; B-B; C-C

B.     A-B; B-C; C-A

C.     A-C; B-A; C-B

D.    none of the above

26. What is true with respect to problem oriented performance audit

A.     The starting point is not known or suspected deviation from what should or could be

B.     The main objective is to find the causes and not to verify the problem

C.     The criteria’s reliability and objectivity are not very important

D.    none of the above

27. The recommendations of the Performance Audit should seek to provide

A.     constructive operational or structural recommendations

B.     The recommendations must fit with the responsibilities of the addressee (legislative, executive authorities)

C.     The recommendations could be allowed by the mandate

D.    All of the above

28. Which among the following is incorrect as to the follow-up of performance audit reports

A.     A follow-up is restricted to the implementations of recommendations

B.     It encourages the user of the reports

C.     The follow-up can contribute to analyze the added value by the performance audit itself

D.    none of the above

29. The objective of compliance auditing

A.     does not encompass the assessment of compliance with regularity

B.     propriety aspects would not be part of the audit scope

C.     enables the SAI to report to the appropriate bodies on the audited entity’s compliance with a particular set of criteria

D.    none of the above

30. Compliance auditing promotes good stewardship by

A.     contributing to improved transparency of the division of responsibility within the state

B.     revealing obvious gaps in legislation

C.     reporting deviations and violations from law and regulations

D.    none of the above

31. Compliance auditing performed

A.     related to the audit of financial statements

B.     separately from audit of financial statements

C.     To gather with performance auditing

D.    either (a) or (b) or (c)

32. When compliance auditing is performed as a part of a performance audit

A.     compliance is one of many aspects of economy, efficiency and effectiveness

B.     non-compliance might be a consequence of the state of the activities under scrutiny in a performance audit

C.     Auditors use professional judgement to decide whether performance or compliance is the primary purpose of audit

D.    All of the above

33. Find out the incorrect statement w.r.to assurance in compliance auditing

A.     In attestation engagements a party other than the auditor measures and evaluates the underlying subject matter

B.     In direct engagements the subject matter information is provided by the auditor

C.     In a limited assurance audit the risk is lower than in a reasonable assurance audit

D.    none of the above