Page 19 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

CHAPTER 3. RISK ASSESSMENT AND INTERNAL CONTROL

Part 1 - SA 315 Risk

315.1 SM21 /M19M
Audit risk is a function of the
a) risks of material misstatement and detection risk.
b) audit risk and detection risk.
c) control risk and detection risk.
d) inherent risk and detection risk.

315.2 M19M/SM21

Components of risk of material misstatement at the assertion level are:
a) Inherent risk and detection risk
b) inherent risk and control risk
c) control risk and detection risk
d) inherent risk, control risk and detection risk

315.3 M19M/N19M/M21M/N21M/SM21

Risk of material misstatement may be defined as the risk
a) that the financial statements are materially misstated after audit.
b) that the financial statements are materially misstated during audit.
c) that the financial statements are materially misstated prior to audit.
d) All of the above

315.4 SM21
The assessment of risks is a
a) matter capable of precise measurement rather than matter of professional judgment
b) matter of professional judgement, rather than a matter capable of precise measurement.
c) matter of professional judgement as well as capable of precise measurement sometimes.
d) None of the above

315.5 N19M/SM21
The assessment of the risks of material misstatement may be expressed in

a) quantitative terms, such as in percentages, or in non-quantitative terms.
b) quantitative terms, such as in percentages,
c) non-quantitative terms.
d) None of the above

315.7 N19R/SM21
____ refer to the audit procedures performed to obtain an understanding of the entity and its
environment, including the entity’s internal control, to identify and assess the risks of material
misstatement, whether due to fraud or error, at the financial statement and assertion levels.
a) Audit assessment procedures
b) substantive procedures
c) test of control
d) Risk assessment procedures

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