COPY: Test Your Knowledge of Auditing

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Questions and Answers

What is the main purpose of auditing?

To detect fraud
To uncover issues encountered during a project lifecycle
To assess whether a company adheres to legal duties
To provide assurance that financial information is free from material misstatement (correct)

What is the scope of auditing?

Auditing is only applied to secretarial and compliance matters
Auditing is only applied to internal controls
Auditing is only applied to financial information of profit-oriented entities
Auditing is applied to a wide range of areas (correct)

What is the difference between financial audit and statutory audit?

A financial audit assesses legal duties, while a statutory audit assesses financial statements and records (correct)
There is no difference
A financial audit is conducted by the government, while a statutory audit is conducted by a third-party
A financial audit is voluntary, while a statutory audit is mandatory

What is the level of assurance provided by an audit?

Reasonable assurance (C) Signup and view all the answers

What is the purpose of a performance audit?

To assess whether an entity is achieving economy, efficiency, and effectiveness in the employment of available resources (D) Signup and view all the answers

What is the purpose of a quality audit?

To verify conformance to standards through review of objective evidence (D) Signup and view all the answers

What is the purpose of a project audit?

To uncover issues, concerns, and challenges encountered during the project lifecycle (A) Signup and view all the answers

What is the purpose of an energy audit?

To reduce the amount of energy input into a building, process, or system without negatively affecting the output(s) (D) Signup and view all the answers

Who governs the audits of publicly traded companies in the US?

The Public Company Accounting Oversight Board (PCAOB) (D) Signup and view all the answers

Flashcards

What's the main goal of auditing?

Ensuring financial information is accurate. Auditors examine records and provide an opinion on whether statements are free from significant errors.

What's the scope of auditing?

Auditing encompasses a wide variety of areas, not just financial statements.

Financial audit vs. Statutory audit: What's the difference?

A financial audit focuses on legal compliance, while a statutory audit focuses on the accuracy of financial reports.

What level of assurance does an audit provide?

Audits don't guarantee absolute certainty, but provide reasonable assurance that financial information is reliable.