Page 21 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

315.18 M19M
Which of the following is correct:
a) The auditor is not expected to, and cannot, reduce audit risk to zero and cannot therefore
obtain absolute assurance that the financial statements are free from material misstatement
due to fraud or error.
b) The auditor is expected to and can reduce audit risk to zero and can therefore obtain absolute
assurance.
c) The auditor is not expected to, and cannot, reduce audit risk to zero and cannot therefore
obtain reasonable assurance that the financial statements are free from material misstatement
due to fraud or error.
d) The auditor is expected to and can reduce audit risk to zero and can therefore obtain
reasonable assurance that the financial statements are free from material misstatement due
to fraud or error.

315.19 SM21

Which of the following is not an assertion about presentation and disclosure?
a) Occurrence and rights and obligations
b) Completeness
c) Classification and understandability
d) Existence

315.20 SM21
The susceptibility of an assertion about a class of transaction, account balance or disclosure to a
misstatement that could be material, either individually or when aggregated with other
misstatements, before consideration of any related controls is-
a) Control Risk
b) Inherent Risk
c) Detection Risk
d) Audit Risk

315.24 SM21
Which assertion is common among the statement of profit and loss and balance sheet captions:
a) Existence
b) Valuation
c) Completeness
d) Measurement

315.25 SM21/M23M
Which of the following is incorrect-
For the purpose of Identifying and assessing the risks of material misstatement, the auditor shall :
a) Identify risks throughout the process of obtaining an understanding of the entity and its
environment, including relevant controls that relate to the risks, and by considering the classes
of transactions, account balances, and disclosures in the financial statements;

b) Assess the identified risks, and evaluate whether they relate more pervasively to the financial
statements as a whole and potentially affect many assertions;
c) Relate the identified risks to what can go wrong at the assertion level, taking account of relevant
controls that the auditor intends to test; and
d) Not consider the likelihood of misstatement, including the possibility of multiple
misstatements, and whether the potential misstatement is of a magnitude that could result in
a material misstatement.

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