C251 ACCT 6 201 Advanced Auditing Objective Assessment Guid e Q & A 2024 1. Multiple Choice: What is the primary objective of an audit of financial statements? A) Detection and prevention of fraud B) Assurance of absolute accuracy of the financial statements C) Expression of an opinion on the fairness of the financial statements D) Compliance with the legal requirements Correct Answer : C) Expressio n of an opinion on the fairness of the financial statements Rationale: The main objective of an audit is to provide reasonable assurance that the financial statements are free of material misstatement, whether caused by fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework. 2. True/False: The auditor's responsibility extends to detecting all instances of fraud during an audit. Answer : False Rationale: While auditors are required to maintain professional skepticism and consider the risk of material misstatement due to fraud, they are not responsible for detecting all instances of fraud, as some may be concealed through sophisticated and carefully organized schemes. 3. Fill -in-the-Blank: The concept of ________ is fundamental to the auditing process and refers to the accumulation of sufficient appropriate audit evidence. Answer : Audit Evidence Rationale: Audit evidence is essential for the auditor to reach conclusions on which to base the audit opinion and includes both information that supports and corroborates management's assertions, as well as any information that contradicts it. 4. Multiple Choice: Which of the following is not a type of audit opinion? A) Unqualified opinion B) Qualified opinion C) Disclaimer of opinion D) Opinion of non -compliance Correct Answer : D) Opinion of non -compliance Rationale: The standard types of audit opinions include unqualified (clean), qualified, adverse, and disclaimer of opinion. An opinion of non -
compliance is not a standard audit opinion type. 5. True/False: An auditor must obtain audit evidence only fro m external sources to form an audit opinion. Answer : False Rationale: An auditor must obtain evidence from appropriate sources, both internal and external, to form a basis for their audit opinion. The reliability of evidence is more important than it s source.
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