Fullname :

King Minh This -

Kiein Joan CLC64A-MSU : M2C6063

Midterm Test 1

NO 1 :
Multiple choices

A
5

.
1
. B 9 .
B 13 .
B

2 .
B 6 C .
10 . B 14 .
D

3
. A 7 D .
11 .
B 15 .
B

4 C .
8. C 12
. A

No 2

1 .
TRUE ·

Assessing these risks helps the auditor understand the client and its environment
,
which in

tum informs the audit

strategy and the special audit procedures that are needed.

As the auditor decreases the acceptable of obtain

2 . TRUE .
audit risk , they must increase the level assurance
they
which
typically results in more intensive and
costly audits procedures.
3
. FALSE .
While a successor auditor can request information from the predecessor auditor
,
the predecessor
limit
is not required to respond fully and without .

They are required to respond in a manner that is

consistent with the standard which limit of information able to

auditing may
the amount
they are provide.
risks to all clients in certain such
technological risks
4 .
TRUE .

Many are common

industry as .

The risksshouldbeconsideredwhenplanningand performingtheauct the financial statements if

the
a se
deemed to be material ,
they may impact the financial position performance of the
as or
company
.
its
. TRUE
6 .
For example ,
a
management team that is aggressive in accounting practices or that has a

high turn over rate

higher risk
may pose a of misstatement.
While
7 FALSE .

comparing a company company' ratios to its prior ration

a be useful in
identifying can

financial performance it's important to umpare with

trends and
changes in the
company's industry benchmarks ,

frame of reference for

This is because
industry benchmark provide evaluating the company's performance
a

relative to its peers and can help investors access the

company's competitiveness and risk protite
.

0 FALSE .
. A
high detection risk indicates that there is a
higher likelihood of a material
misstatement in the financial statement .
As the result ,
the auditor would need to obtain a

greater amount of audit evidence to reduce the risk to an acceptable level .

Therefore ,
a
high
detection risk would require a larger amount of audit evidence not a lower .
amount
 No3

1
.
Describe the
objectives of the independent audit :

- An independent audit is an examination of the financial statement in accordance with certain

Standards
auditing standards such as International on
Auditing.
The of audit of financial statements is to whether
-

objective an enable the auditor to express an opinion

the financial statements are prepared ,

in all material respects ,
in accordance with an identified

financial framework of other . The auditor after objective

reporting criteria ,
an
evidence-gathering
examination , expresses an opinion on the fair presentation of financial statements.

fire which audit beneficial to kenten

2 .

Identify ways in an independent maybe

- An independent audit can also be beneficial to

+ serve as a basic for the extension of

oudit

+
rating agencies with required information
supply credit

determine it
+
accounting records and reporting meeting accounting standards
(such as International
Accounting Standards (IASs)
+ serve as a basic for preparation of tax returns
.

establish of losses from fire

+ amounts
,
theft and
burglary
establish good basic for decision
+ a
management making
determine amounts receivable under
+ or
payable
+
argements for bonuses based on profits
+ contracts for
sharing expenses
+ cost -

plus contracts
.

No4

1
5 .

6
, b

3 . b 7 .
b

4 .
b 8
, a