Advantages & Limitations of Audit

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What is one of the advantages of audited accounts?

They provide low quality information

They create uncertainty for shareholders

They encourage employees to commit fraud

They give confidence to users about the information's quality (correct)

Who benefits from the safeguarding of financial interests by audited accounts?

Employees

Owners of the company (shareholders) (correct)

Government authorities

Creditors

What do audited statements help government authorities with?

Settling liability for taxes (correct)

Detecting fraud

Safeguarding financial interests

Encouraging embezzlement

What type of evidence is obtained by an auditor for an Assurance Engagement?

"Sufficient" in quantity and "Appropriate" in quality Signup and view all the answers

What is one of the elements of an Assurance Engagement?

All information to be examined by the practitioner Signup and view all the answers

What do auditors review when detecting fraud or error?

Existence & operations of various controls operating in the entity Signup and view all the answers

What are some inherent limitations of audit as discussed in the text?

Future events may affect an entity adversely. Signup and view all the answers

What is the nature of financial reporting that poses a challenge to audit?

It involves subjective decisions by management. Signup and view all the answers

How does a review engagement differ from an audit engagement?

Review provides a lower level of assurance than audit. Signup and view all the answers

Why may auditors face challenges in obtaining complete information during an audit?

Practical and legal limitations exist on the ability to obtain complete information. Signup and view all the answers

Why is maintaining a balance between benefit and cost difficult in the context of financial statements?

Balance between benefit and cost becomes challenging due to fixed deadlines and cost considerations. Signup and view all the answers

What do auditors not have absolute assurance about in terms of financial statements?

The absence of material misstatements due to frauds or errors. Signup and view all the answers

Advantages & Limitations of Audit

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Questions and Answers

What is one of the advantages of audited accounts?

Who benefits from the safeguarding of financial interests by audited accounts?

What do audited statements help government authorities with?

What type of evidence is obtained by an auditor for an Assurance Engagement?

What is one of the elements of an Assurance Engagement?

What do auditors review when detecting fraud or error?

What are some inherent limitations of audit as discussed in the text?

What is the nature of financial reporting that poses a challenge to audit?

How does a review engagement differ from an audit engagement?

Why may auditors face challenges in obtaining complete information during an audit?

Why is maintaining a balance between benefit and cost difficult in the context of financial statements?

What do auditors not have absolute assurance about in terms of financial statements?

More Quizzes Like This

Federal Reserve Board 2023 Annual Financial Statements Release

Peruvian Law 29720 on Audited Financial Statements

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Advantages &amp; Limitations of Audit

Podcast Beta

Questions and Answers

What is one of the advantages of audited accounts?

Who benefits from the safeguarding of financial interests by audited accounts?

What do audited statements help government authorities with?

What type of evidence is obtained by an auditor for an Assurance Engagement?

What is one of the elements of an Assurance Engagement?

What do auditors review when detecting fraud or error?

What are some inherent limitations of audit as discussed in the text?

What is the nature of financial reporting that poses a challenge to audit?

How does a review engagement differ from an audit engagement?

Why may auditors face challenges in obtaining complete information during an audit?

Why is maintaining a balance between benefit and cost difficult in the context of financial statements?

What do auditors not have absolute assurance about in terms of financial statements?

More Quizzes Like This

Federal Reserve Board 2023 Annual Financial Statements Release

Peruvian Law 29720 on Audited Financial Statements

Advantages & Limitations of Audit