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Audit your financial statement
Auditing your financial statement does not only offer certainty about the financial state of affairs of your business just for you. Also, external parties such as your business relations rely on the independent auditor's opinion. In addition to this, an independent audit also adds value by offering many valuable insights. That is why our audit of your financial statement goes beyond solely checking figures. Our specialists translate the data into risks and opportunities, and make targeted recommendations to improve your business processes.
MC
1-13 An independent audit adds value to the communication of financial information
because the audit
a. Confirms the exact accuracy of management’s financial representations.
b. Lends credibility to the financial statements.
c. Guarantees that financial data are fairly presented.
d. Assures the readers of financial statements that any fraudulent activity has been
corrected.
1-14 Which of the following best describes the reason why an independent auditor is often
retained to report on financial statements?
a. Management fraud may exist, and it is more likely to be detected by independent
auditors than by internal auditors.
b. Different interests may exist between the entity preparing the statements and the
persons using the statements, and thus outside assurance is needed to enhance the
credibility of the statements.
c. A misstatement of account balances may exist, and all misstatements are generally
corrected as a result of the independent auditor’s work.
d. An entity may have a poorly designed internal control system.
1-15 Which of the following best describes relationships among auditing, attest, and
assurance services?
a. Attest is a type of auditing service.
b. Auditing and attest services represent two distinctly different types of services—
there is no overlap.
c. Auditing is a type of assurance service.
d. Assurance is a type of attest service.
1-16 Which of the following statements relating to attest and assurance services is not correct?
a. Independence is an important attribute of assurance service providers.
b. Assurance services can be performed to improve the quality or context of information
for decision makers.
c. Financial statement auditing is a form of attest service but it is not an assurance
service.
d. In performing an attest service, the CPA determines the correspondence of the
subject matter (or an assertion about the subject matter) against criteria that are
suitable and available to users.
1-17 For what primary purpose does the auditor obtain an understanding of the entity and
its environment?
a. To determine the audit fee.
b. To decide which facts about the entity to include in the audit report.
c. To plan the audit and determine the nature, timing, and extent of audit procedures
to be performed.
d. To limit audit risk to an appropriately high level.
1-18 Which of the following statements best describes the role of materiality in a financial
statement audit?
a. Materiality refers to the “material” from which audit evidence is developed.
b. The higher the level at which the auditor assesses materiality, the greater the
amount of evidence the auditor must gather.
c. The lower the level at which the auditor assesses materiality, the greater the
amount of evidence the auditor must gather.
d. The level of materiality has no bearing on the amount of evidence the auditor
must gather.