CA Inter Audit – Chapter 4 – Risk Assessment and Internal Control MCQs – Set II

An identified and assessed risk of material misstatement in the auditor’s professional judgement, requires special audit consideration is called as

An understanding of the entity’s selection and application of accounting policies may encompass such matters

Obtaining an understanding of the entity and its environment, including the entity’s internal control is a ____

The independence of an internal auditor will most likely be assured if he reports to the

When an independent auditor relies on the work of an internal auditor, he or she should

When an independent auditor decides that the work performed by internal auditors may have bearing on the nature, timing and extent of planned audit procedures, the independent auditor should evaluate objectivity of the internal auditor. The most important factor influencing it would be

In comparison to the independent auditor, an internal auditor is more likely to be concerned with

The SAs do not ordinarily refer to inherent risk and control risk separately, but rather to a combined assessment of the risks of material misstatement

An auditor assesses control risk because

A number of checks and controls exercised in a business to ensure its efficient working is known as

Objective of internal control excludes which of the following?

The overall attitude and awareness of an entity’s board of directors concerning the importance of internal control is reflected in which process?

Business risk may arise from which of the following?

Control Risk refers to

If before considering the internal controls at the audited entity, there is a high probability of certain errors in the financial statements, we particularly speak of

Detection Risk refers to

The risk that an auditor’s procedures will lead to the conclusion that a material misstatement does not exist in an account balance when, in fact, such misstatement actually does exist is known as which risk?

There is inverse relationship between which of the following risk?

For a given level of audit risk, the acceptable level of detection risk bears which relationship to the assessed risk of material misstatement at the assertion level

Which of the following risk are inversely related to each other?

The sequence of steps in the auditor’s consideration of internal control is as follows:

An auditor should study and evaluate internal controls to

Audit risk includes

Misstatement arises from

___ refers to a difference between the amount, classification, presentation or disclosure of a reported financial statement item and the amount, classification, presentation or disclosure that is required for the item to be in accordance with the applicable financial reporting framework.

The risk of material misstatements may exist at how many levels.

Internal control shall ____ risk of material misstatement

The audit procedures performed to obtain an understanding of the entity and its environment, including the entity’s internal control, to identify and assess the risk of material misstatements, whether due to fraud or error, at the financial statement and assertion levels is known as _____?

Risk assessment procedures include wich of the following?

Complete the statement in correct information:
The information obtained by performing risk assessment procedures _______

Which of the following is not an advantage of internal control?

The study of various aspects of internal control is divided in how many sections

Which of the following is not a limitation of internal control?

Components of internal control does not include

The control environment includes

Which of the following is not an element of the control environment?

What are the policies and procedures that help ensure that management directives are carried out

Risks of material misstatements are greater for ____

The risk of material misstatements may be greater for which matters that require the development of accounting estimates.

The process to assess the effectiveness of internal control performance over time is which type of controls?

How many number of methods are available to evaluate internal control?

Which of the following is not a method to evaluate internal control?

The questionnaire is usually issued to the ____ who is requested to get it filled by the concerned department.

Test of controls are performed to obtain audit evidence about the effectiveness of the

The concept of materiality is applied by the auditor in

A private company is required to appoint an internal auditor if its turnover during the preceding financial year equals or exceeds ______?

Test of controls may include

Every unlisted public company having paid up share capital of ____ rupees or more during the preceding financial year shall be required to appoint an internal auditor.

The objectives and scope of internal audit with respect to internal control includes the following:

The policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information is called as __________?

Maintenance of internal control system is the responsibility of the _____?

Shikhar Ltd. conducts quarterly review of operations. It discovers that unrest in a European country may affect the supply of raw materials to it the next quarter. This is an example of

In respect of some risks, the auditor may judge that it is not possible or practicable to obtain sufficient appropriate audit evidence only from