A. Reperformance and observation
B. Inquiry and analytical procedures
C. Comparison and conformation
D. Inspection and verification
✅ The correct answer is option A.
116. Control risk is assessed at
A. Overall financial statements level
B. Fraud risk factor level
C. Financial statement assertion level
D. Control environment level
✅ The correct answer is option C.
98. An auditor assesses control risk because it
A. Affects the audit risk
B. Affects the level of detection risk that auditor may accept
C. Helps him to fix materiality level for each financial assertion
D. Is directly related to inherent risk
✅ The correct answer is option B.
96. A flow chart, made by the auditor, of an entity’s internal control system is a graphic representation that depicts the auditor’s.
A. Understanding of the system
B. Understanding of fraud risk factors
C. Documentation of assessment of control risk
D. Both (a) and (c)
✅ The correct answer is option A.
94. The performance of tests of control is documented in
A. Audit programme
B. Flow charts
C. Working papers
D. Any of the above
✅ The correct answer is option C.
112. The independence of an internal auditor will most likely be assured if he reports to the
A. President Finance
B. President System
C. Managing Director
D. CEO
✅ The correct answer is option C.
110. In comparison to the independent auditor, an internal auditor is more likely to be concerned with
A. Cost accounting system
B. Internal control system
C. Legal compliance
D. Accounting system
✅ The correct answer is option B.
109. When an independent auditor relies on the work of an internal auditor, he or she should
A. Examine the scope of internal auditor’s work
B. Examine the system of supervising review and documentation of internal auditor’s work
C. Adequacy of related audit programme
D. all of the above
✅ The correct answer is option D.
108. Proper segregation of duties reduces the opportunities in which a person would both
A. Establish controls and executes them
B. Records cash receipts and cash payments
C. Perpetuate errors and frauds and conceals them
D. Record the transaction in journal and ledger
✅ The correct answer is option C.
107. Analytical procedures are least likely to be use in the audit of –
A. Cash balance
B. Investments
C. Bills receivables
D. Debtors
✅ The correct answer is option A.