Question

The objective of financial statements by an independent auditor is to verify that the financial statements are free of misstatements and accurately present the company’s financial position and results of operation.

True

False

Responsibility for the fair presentation of financial statements rests with the client’s management, not with the advisor.

True

False

Errors are usually more difficult for an auditor to detect than irregularities.

True

False

Audits are expected to provide a higher degree of assurance for the detection of material irregularities, such as management fraud, than is provided for an equally material error.

True

False

The auditor’s responsibility for uncovering direct-effect illegal acts is the same as for irregularities.

True

False

Auditors have a higher degree of responsibility for detecting direct-effect illegal acts than indirect-effects illegal acts.

True

False

When an auditor issues a qualified report, he or she must use the term “except for” in the opinion paragraph.

True

False

The auditor’s first course of action when an illegal act is uncovered should be to immediately notify the appropriate authorities, including but limited to, the police, and for publicly-held companies, the U.S. Department of Justice.

True

False

Under the cycle approach to segmenting an audit, transactions recorded in different journals should be never be combined with the general ledger balances that results from those transactions.

True

False

Auditors have found that the most efficient way to conduct audits is to focus primarily on testing classes of transactions and performing minimal or no tests of ending account balances

True

False

Transactions-related audit objectives vary from audit to audit, depending on the nature and characteristics of the client’s business and industry.

True

False

The audit objective of posting and summarization is associated with the management assertion of presentation and disclosure.

True

False

Answer 1

1) The objective of financial statements by an independent auditor is to verify that the financial statements are free of misstatements and accurately present the company’s financial position and results of operation.

Ans : True, yes the main objective of the Auditer to check the financial statements free of misstatements.

2) Responsibility for the fair presentation of financial statements rests with the client’s management, not with the advisor.

Ans: False, No the responsobility of presentation of financial statements rest with both clients and mainly on advisor.

3) Errors are usually more difficult for an auditor to detect than irregularities.

Ans : False, For an auditor it should be easy to detect the errors and irregulatons, as it is his core responsibility.

4) Audits are expected to provide a higher degree of assurance for the detection of material irregularities, such as management fraud, than is provided for an equally material error.

Ans : True, Yes Audits are expected to provide a higher degree of assurance for the detection of material irregularities, such as management fraud, than is provided for an equally material error, because they have degree and knowledge of it.