2116924, 9:31 PM IcAlBos MCQ Result Mr. SHIVAM KAUSHIK Fes Total Marks 20/12 ii Lae Attempted Questions 20 Out of 20 Time 00:15:16 hntps:fbosve ica orgmea_resut php ?id=609773 we216124, 9:91 PM cat Bos Paper 5: Auditing and Ethics Simple,medium, difficult Chapter 1 : Nature, Objective And Scope Of Audit Chapter 2 : Audit Strategy, Audit Planning And Audit Programme |_]Green denotes correct answer || | Red denotes wrong answer Question -1: Statement 1: The establishment of the overall audit strategy and the detailed audit plan are not necessarily discrete or sequential process but are closely inter-related. Statement 2: The auditor shall establish an overall audit strategy that guides the development of audit plan. Answer - 1 : only Statement 1 is correct Answer - 2 : Only Statement 2 is correct Answer - 3 : Both Statements 1 & 2 are correct Answer - 4 : Both Statements 1 & 2 are incorrect Your Answer: Both Statements 1 & 2 are correct Va Question - 2: Identify the most appropriate statement: - Answer - 1: Prospective financial information relates to future events. Since no evidence is available to support the assumptions on which prospective financial information is based, auditor is not in a position to express an opinion whether results shown in prospective information will be achieved. nitps:Jboslve ial. orgimeq_result php?id=6097732116124, 9:31 PM IcAl Bos ‘Answer - 2 : In assurance reports involving prospective financial information, Standards on Auditing apply. Answer - 3 : In assurance engagements involving prospective financial information, practitioner provides a report assuring that nothing has come to practitioner’s attention to suggest that assumptions do not provide a reasonable basis for the projection. Answer - 4: In assurance engagements involving prospective financial information, practitioner provides a report assuring that nothing has come to practitioner’s attention to suggest that assumptions provide a reasonable basis for the projection. Your Answer: Prospective financial information relates to future events. Since no evidence is available to support the assumptions on which prospective financial information is based, auditor is not in a position to express an opinion whether results shown in prospective information will be achieved. Question - 3: An consists of a series of verification procedures to be applied to the financial statements and accounts of a given entity for the purpose of obtaining sufficient evidence to enable the auditor to express an informed opinion on financial statements. Answer - 1; audit programme Answer - : audit plan Answer - 3 : assertion Answer - 4 : audit paper Your Answer: audit plan hntps:fbosve ica orgimeq_resutphp?id-609773 ane2116024, 9:31 PM IcAt aos Question - 4: The ausltor shall develop an audit plan that shall include a description of: Answer - 1; The nature, timing and extent of planned risk assessment procedures Answer - 2 : The nature, timing and extent of planned further audit procedures at the assertion level. Answer - 3 : Other planned audit procedures that are required to be carried out so that the engagement complies with SAs. Answer - 4: All of the above Your Answer: All of the above Question - 5: Advesh & Co, Chartered Accountants firm got an assignment of statutory audit for 3 years of Vinesh LLP. The first year of audit was FY 2021-22. During the first and second year of audit, Advesh & Co devised an audit plan for Vinesh LLP and did not prepare an audit plan for FY 2023-24. Kindly state which of the following statement is true in the above context. Answer - 1: Advesh & Co need not prepare the audit plan for FY 2023-24 because the audit plan is already prepared in the first year of audit. Answer - 2 : Advesh & Co need not prepare the audit plan for FY 2023-24 since it is recurring audit. Answer - 3 : Advesh & Co should prepare the audit plan for FY 2023-24 because planning is not a discrete phase of an audit, but rather a continual and iterative process. hntps:fbosve ica orgimea_resutphp?id-6097732124, 9:91 Pa IcAlB0s Answer - 4 : Advesh & Co need not prepare the audit plan for FY 2023-24 because the audit plan is prepared for two years of audit. Your Answer: Advesh & Co need not prepare the audit plan for FY 2023-24 since it is recurring audit. Question - 6: Which of the following is the responsibility of the auditor: Answer - 1: Preparation and presentation of the financial statements in accordance with applicable financial reporting Answer - : Design, implementation and maintenance of internal controls Answer - 3 : Express an opinion on the Financial Statements Answer - 'o obtain limited assurance. Your Answer: Express an opinion on the Financial Statements Question - No business or institution can effectively carry on its activities without the help of proper Answer «1: Audit Answer - 2 : Record and accounts Answer - 3 : neither (a) nor (b) Answer - : both (a) and (b) Your Answer: both (a) and (b) hntps:bosiveicalorgimeg_result php ?id=609773 siz2116024, 9:31 PM IcAt aos Question - 8: Which of following is false regarding nature of audit planning? Answer - 1 : Planning is not a distinct phase of audit. Answer - 2 : Engagement team members are not involved in audit planning. Answer - 3 : Elements of planning may be discussed by auditor with company’s management. Answer - 4 : Planning includes need to consider determination of materiality. Your Answer: Engagement team members are not involved in audit planning. Question - 9: Planning is process of an audit that often begins shortly after (or in connection with) the completion of the previous audit and continues until the completion of the current audit engagement: Answer - 1: continuous Answer - 3 : neither continuous nor discreet Answer - 4: strategic Your Answer: continuous Question - 10 : which of the following is not addressed by the overall audit strategy : htps:fbostve ical orgmeg_resultphp?id-609773 ena2116924, 9:31 PM IcAl Bos ‘Answer - 1: scope of the audit Answer - 2 : timing of the audit Answer - 3 : direction of the audit Answer - 4: monitoring of the audit Your Answer: monitoring of the audit NN — Question - 11: Which of the following is correct: Answer - 1; The auditor shall establish an audit plan that sets the scope, timing and direction of the audit, and that guides the development of the overall audit strategy. Answer - 2: The auditor shall establish an overall audit strategy that sets the scope, timing and direction of the audit, and there is no need to guide the development of the audit plan. Answer - 3 : The auditor shall establish an overall audit strategy that sets the scope, timing and direction of the audit, and that guides the development of the audit plan. Answer - 4 : The auditor shall establish an audit plan that sets the scope, timing and direction of the audit, and that there is no need to guide the development of the overall audit strategy. Your Answer: The auditor shall establish an overall audit strategy that sets the scope, timing and direction of the audit, and there is no need to guide the development of the audit plan. Question - 12: Which of following is false about meaning /nature of auditing? hntps:fbosve ica orgimeq_resut php?id-609773 me2116924, 9:31 PM IcAl Bos Answer - 1 ; Its basic nature lies in providing assurance to users of financial statements. Answer - 2: Its interdisciplinary in nature. Answer - [t is independent examination of financial statements of listed entities alone. Answer - 4 : Its nature helps in providing comfort that financial statements are not misleading. Your Answer: It is interdisciplinary in nature. Question - 13: ‘The overall audit strategy and the audit plan remain the responsibility Answer - 1; auditor’s Answer - 2 : management's Answer - 3 : those charged with governance. Answer - 4 : both management and those charged with governance. Your Answer: auditor’s Question - 14: The auditor of Deli financi: us Sweets Limited was of the opinion that objective of audit of statements of a company is to provide reasonable assurance that financial statements of that company are free from misstatements. Which type of misstatements are mentioned by auditor of Delicious Sweets Limite: ‘Answer - 1; Simple. Material. htps:fbostve ical orgimeg_resultphp?id-609773 ana Answer -2116924, 9:31 PM IcAl Bos Answer - 3 : Easy. Answer - 4: Competent. ‘Your Answer: Easy. Question - 15: framework means a framework adopted in the preparation and presentation of the financial statements that is acceptable in view of the nature of the entity and the objective of the financial statements, or that is required by law or regulation. Answer - 1: Financial reporting Answer - 2 : Applicable financial reporting, ‘Answer - 3 : Financial verification Answer - 4 : Financial analysis Your Answer: Applicable financial reporting Question - 16 : CA X is in the process of establishing audit strategy for a company engaged in the business of trading of Fast-moving consumer goods (FMCG). Which of following is not a factor to be considered by CA X while establishing audit strategy for the company? Answer - 1: Expected AGM timeline of the company Answer Volume of transactions Answer - 3 : Reporting requirements under Schedule III of Companies Act, 2013 Answer - 4: Deciding about appropriateness of type of audit procedures to be used in conducting the audit htps:fbostve ical orgmeg_resultphp?id-609773 ena2116924, 9:31 PM IcAl Bos Your Answer: Expected AGM timeline of the company Question - 17: ZETA Private Limited is a recently established start-up formed with objective for promoting use of polyhouses and offering farmers necessary know-how for setting up such structures. Polyhouses enable farmers to grow good quality crops like vegetables throughout the year, At a meeting, directors discuss about pros and cons of independent audit of financial statements in a start-up like theirs. Which of following statements is false in this regard? Answer - 1 ; It is mandatory requirement for their start-up. There are no choices. Answer - 2 : Audited financial statements may be used by start-up for obtaining funds from prospective investors. Answer - 3 : Such an audit can point out deficiencies in internal control system of start-up’s business. Answer - 4 : Such an audit would necessarily result in reflection of higher profits leading to higher income tax liabilities for start-up. Your Answer: Such an audit would necessarily result in reflection of higher profits leading to higher income tax liabilities for start-up. Question - 18 : Inherent limitations of an audit of financial statements arise due to a number of factors. Which of the following is not such a factor? Answer - 1 : Practical limitations on ability of auditor to obtain audit evidence Answer - 2 : Legal limitations on ability of auditor to obtain audit evidence Answer - 3 statements : Involvement of subjective judgments in preparation of financial htps:fbostve ical orgimeg_resultphp?id-609773 sore262, 931 Pa len pos Answer - 4 : Ability of auditor to accept valid evidence due to high professional knowledge Your Answer: Ability of auditor to accept valid evidence due to high professional knowledge Question - 19: Planning an audit involves Answer - 1; establishing the overall audit strategy for the engagement and developing an audit plan. Answer - 2 : establishing the overall audit plan for the engagement and developing an audit strategy. Answer - 3 : establishing the overall audit plan for the engagement Answer - 4 : developing an audit strategy. Your Answer: establishing the overall audit strategy for the engagement and developing an audit plan. Question - 20: As explained in SA 200, “Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing”, is obtained when the auditor has obtained sufficient appropriate audit evidence to reduce audit risk (i.c., the risk that the auditor expresses an inappropriate opinion when the financial statements are materially misstated) to an acceptably low level. Answer - 1: absolute assurance Answer - 2 : limited assurance Answer - 3 : reasonable assurance htps:Ibostve ical orgimeg_resultphp?id-609773 se2116924, 9:31 PM IcAl Bos ‘Answer - 4 : reasonable or absolute assurance Your Answer: reasonable assurance rane