Question

47. Which of the following statements are correct?

Select which option is correct.

Select one or more:

1. The level of professional skepticism can be reduced where the auditor has past experience with the entity indicating the honesty and integrity of management.
2. The level of professional skepticism needs to be maintained throughout the whole engagement.
3. Professional skepticism implies an expectation of fraud or error, so is a biased viewpoint.
4. Professional skepticism is not important in considering management's explanations for unusual trends

50. Which one of the following does not constitute an appropriate audit planning procedure that the auditor should employ relating to the risk of fraud?

Select one:

1. Increase the level of professional scepticism
2. Incorporate an element of unpredictability in the selection of the nature, timing and extent of the audit procedures to be performed.
3. The engagement team needs to discuss the susceptibility of the entity's financial statements to material misstatement due to fraud.
4. Make enquiries to obtain information and so identify the risks of material misstatement due to fraud

55. Which of the following circumstance would increase control risk?

Select one:

1. The auditor is relying on tests of controls and reducing substantive procedures accordingly
2. There is a low turnover of staff in the finance department
3. There is a high turnover of staff in the finance department
4. The client operates in a highly regulated industry

Answer 1

47. Which of the following statements are correct?
Select which option is correct.
Select one or more:
The level of professional skepticism can be reduced where the auditor has past experience with the entity indicating the honesty and integrity of management.
The level of professional skepticism needs to be maintained throughout the whole engagement.	Correct	Professional skepticism is important and necessary throughout the entire audit process.
Professional skepticism implies an expectation of fraud or error, so is a biased viewpoint.
Professional skepticism is not important in considering management's explanations for unusual trends
50. Which one of the following does not constitute an appropriate audit planning procedure that the auditor should employ relating to the risk of fraud?
Select one:
Increase the level of professional scepticism	Correct	This is not an audit planning procedure, its just state of mind.
Incorporate an element of unpredictability in the selection of the nature, timing and extent of the audit procedures to be performed.
The engagement team needs to discuss the susceptibility of the entity's financial statements to material misstatement due to fraud.
Make enquiries to obtain information and so identify the risks of material misstatement due to fraud
55. Which of the following circumstance would increase control risk?
Select one:
The auditor is relying on tests of controls and reducing substantive procedures accordingly
There is a low turnover of staff in the finance department
There is a high turnover of staff in the finance department	Correct	the assessed level of control risk increases when Use a larger sample size for substantive tests.
The client operates in a highly regulated industry