Page 82 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs

CHAPTER 11 - Ethics and Terms of Audit Engagements

Part 1-Ethics

ETH.1 SM23
Which of the following is not a fundamental principle governing professional ethics?
a) Professional competence and due care
b) Integrity
c) Objectivity
d) Safeguards to independence

Part 2 - SA 210

210.1 N19M
According to SA 210 “Agreeing the Terms of Audit Engagements”, The auditor shall agree the terms

of the audit engagement with:
a) management
b) those charged with governance
c) management or those charged with governance, as appropriate.
d) Audit committee

210.4 N19M

If law or regulation prescribes in sufficient detail the terms of the audit engagement,
a) the auditor need not record them in a written agreement, except for the fact that such law or
regulation applies, and that management acknowledges and understands its responsibilities.
b) the auditor need not record them in a written agreement
c) the auditor needs to record them in a written agreement
d) None of the above

210.6 SM21
A request from the client for the auditor to change the engagement may result from-
1. a change in circumstances affecting the need for the service,
2. a misunderstanding as to the nature of an audit or related service originally requested
3. 3. a restriction on the scope of the engagement, whether imposed by management or caused
by circumstance
a) (1) only
b) (1) and (2)
c) (1), (2) and (3)
d) (1) or (2) or (3)
Author’s Note : ICAI has asked this question twice Once they gave “c” and then “d” as answer. Correct
answer “d” as any of the three point can become reason for revision of engagement letter.

210.7 M19M/SM21/M23M
If the auditor concludes that there is reasonable justification to change the engagement and if the
audit work performed complied with the SAs applicable to the changed engagement, the report

issued would be appropriate for the revised terms of engagement. In order to avoid confusion, the
report would not include reference to:
a) The original engagement; or any procedures that may have been performed in the original
engagement.
b) the original engagement;
c) any procedures that may have been performed in the original engagement
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