EASY
2. Which of the following are the factors that need to be considered during agreement between the auditor and the auditor’s expert?
A) Client’s approval in choosing the auditor’s expert.
B) Auditor’s expert’s personal opinion about the client.
C) Nature, scope, and objectives of the expert’s work.
D) All the above statements are correct.
E) Only A and C are correct.
Correct answer: (C)
CAS & Paragraph references: CAS 620.11(a) (A27). Option C is correct because nature, scope, and objectives of the expert’s work are one of the matters that need to be considered during agreement. It is important for both the auditor and the auditor’s expert to understand each other based on their way of working and continue to work with each other.
Which circumstance would NOT create a threat to the objectivity of an auditor’s expert?
A) The expert is employed by the auditor’s firm.
B) The auditor’s expert and the CFO of the client are brothers-in-law.
C) The auditor’s expert holds shares of the company under review.
D) The auditor’s expert was previously employed by the client during the year under review.
E) All of the above are threats to the objectivity of an auditor’s expert
Correct answer: A)
CAS & Paragraph references: CA.18 A broad range of circumstances may threaten objectivity, for example, self-interest threats (C), advocacy threats, familiarity threats (B), self-review threats (D), and intimidation threats
In which independent situation is the auditor likely to have doubts in their evidence?
A) Result of an audit procedure gave a completely different result then what the auditor was expecting the result to be.
B) The engagement partner notices that the audit opinion for the current year is an adverse opinion whereas the audit opinion of last year was an unqualified opinion. Most audit procedures performed this year were similar to the one’s performed last year.
C) An auditor noticed that their fellow co-auditor did not sign off on the audit procedure that they performed and completed two days earlier. They notice that their co-auditor did sign off on rest of the working papers though.
D) An auditor uses official documents provided by the entity after deeming them to be accurate, precise, detailed, complete and reliable for audit evidence. The document in question gives information about the major clients of the entity and their outstanding payables owing to the entity. The auditor sends out positive confirmations to the clientele and finds that over half of the clientele do not respond or do not agree with the payables owing.
E) All of the above
Correct answer: D)
CAS & Paragraph references: CAS 500.11, the correct answer is D) because the evidence is inconsistent between two sources. The amounts receivable in the entity’s official documents are vastly different then the auditor’s own evidence collected from the confirmation. In this case the auditor may modify their approach towards the audit, they may decide to rely less on the entity’s official documents and instead rely on other sources for evidence.
4. Which of the following is NOT information to be used as audit evidence?
A) Relevant and reliable information
B) Work of management expert
C) Information provided by the entity
D) External sources
E) None of the above
Correct answer: E)
CAS & Paragraph references: CAS 500.7-9, all of these are sources of information that an auditor can use provided they are deemed reliable by the auditor
What is one of the means for selecting items for testing?
A) Selecting all the items within a class of transactions or balances
B) Items within a class of transactions or balances selected by the internal auditors of the entity
C) Consultation of expert for selection of items within the entire population that have been deemed relevant to the audit
D) Only A & B
E) None of the above
Correct answer: A
CAS & Paragraph references: CAS 500.A63, selecting all items within a class of transactions or balances is valid but typically used for test of details
Which of the following statement(s) is true about referring to the auditor’s expert in the audit report?
A) It is necessary to always provide reference to the auditor’s expert in the audit report.
B) Referencing to the auditor’s expert can be done, if required by law or regulation.
C) It is not required to reference the auditor’s expert’s work at all.
D) Referencing can be provided if the auditor needs to explain any modification to the auditor’s report.
E) Providing reference to the expert’s work in the audit report can help reduce and divide the responsibility of the auditor’s opinion.
Correct answer: (B) & (D)
CAS & Paragraph references: CAS 620.14 (A41) and CAS 620.15 (A42). Option B and D are correct because it’s not always necessary to provide reference to the auditor’s expert in the audit report except it’s required by the law or the auditor needs to explain any modification in the report because sometimes, expert’s work leads to change the opinion of the auditor.
10. In which situation would it be most likely appropriate for the auditor to use the work of an auditor’s expert?
A) When management’s financial statement disclosures are lengthy and complex.
B) When the auditor lacks sufficient specialized knowledge to evaluate a material item in the financial statements.
C) When internal audit has already tested the relevant account balances.
D) When the auditor wants to reduce audit time and costs on audit procedures.
E) All of the above
Correct answer: B)
CAS & Paragraph references: CAS 620.7, If expertise in a field other than accounting or auditing is necessary to obtain sufficient appropriate audit evidence, the auditor shall determine whether to use the work of an auditor's expert
Which of the following statement(s) are the factors that need to be considered while evaluating the adequacy of auditor experts’ work?
A) Auditor’s experts’ presentation and formatting style.
B) Checking the length of the report provided by the expert.
C) Relevance and reasonableness of the expert’s findings and conclusions.
D) Reperforming calculations.
E) All the above statements are considered.
Correct answer: (C) and (D)
CAS & Paragraph references: CAS 620.12 (a) (A33 - A34). Option C and D are correct because evaluating the work of the expert requires auditors to check how relevant and reasonable the work is and which includes recalculating figures as well. It is not limited to these options but has many more things that need to be considered.
Which of the following statement(s) is true about referring to the auditor’s expert in the audit report?
A) It is necessary to always provide reference to the auditor’s expert in the audit report.
B) Referencing to the auditor’s expert can be done, if required by law or regulation.
C) It is not required to reference the auditor’s expert’s work at all.
D) Referencing can be provided if the auditor needs to explain any modification to the auditor’s report.
E) Providing reference to the expert’s work in the audit report can help reduce and divide the responsibility of the auditor’s opinion.
Yes