ISA 220 Quality Control for an Audit of Financial Statements MCQs

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ISA 220 Quality Control for an Audit of Financial Statements requires the firm to establish a system of quality control to ensure the firm complies with
ISA 220 Quality Control for an Audit of Financial Statements MCQs

ISA 220 Quality Control for an Audit of Financial Statements

ISA 220 Quality Control for an Audit of Financial Statements requires the firm to establish a system of quality control to ensure the firm complies with professional standards. Here on MCQs.club we have made easily understood Multiple-Choice Questions (MCQs) on ISA 220 that cover the ISA 220 Summary, the revised ISA 220, SA 220 MCQs with questions and answers. These MCQ are useful for Professional accountancy exams, competitive exams and Business management exams.

  1. ISA 220 Quality Control for an Audit of Financial Statements requires the firm to establish a system of quality control to ensure the firm complies with professional standards and issues reports that are appropriate in the circumstances.
    1. The above statement is correct
    2. The above statement is incorrect
  1. For Quality Control for an Audit of Financial Statements Policies and procedures should be established which address:
    1. Leadership responsibilities for quality within the firm
    2. Relevant ethical requirements
    3. Acceptance and continuance of client relationships and specific engagements
    4. Human resources, Engagement performance, Monitoring.
    5. All of the above
  1. The engagement partner takes overall responsibility for the overall quality of the engagement. The engagement partner should ensure:
    1. Compliance with ethical requirements during the engagement.
    2. Appropriate acceptance and continuance procedures have been performed.
    3. Sufficient appropriate evidence has been obtained to support the audit conclusion through a review of the documentation and discussion with the audit team.
    4. All of the above
  1. The engagement partner should ensure that the engagement team collectively have the competence and capabilities to perform the audit in accordance with professional standards. This includes:
    1. knowledge of professional standards
    2. knowledge of relevant industries in which the client operates
    3. the ability to apply judgment and an understanding of the firm’s quality control policies and procedures.
    4. All of the above
  1. Engagement performance comprises direction, supervision and review of the engagement.
    1. True
    2. False
  1. Engagement performance “direction” involves informing team members of:
    1. Their responsibilities, Objectives of the work to be performed
    2. The nature of the business, Risks
    3. Problems that may arise, The detailed approach to the performance of the engagement.
    4. All of the above
  1. Engagement performance “Supervision” includes:
    1. Tracking the progress of the audit to ensure the timetable can be met
    2. Considering the competence of the team
    3. Addressing significant matters arising and modifying the planned approach accordingly
    4. All of the above

  1. Engagement performance “Review” responsibilities include consideration of whether:
    1. The work has been performed in accordance with professional standards
    2. Appropriate consultations have taken place
    3. The work performed supports the conclusions reached
    4. All of the above
  1. Listed entities and other high-risk clients should be subject to an engagement quality control review.
    1. True
    2. False
  1. Engagement Quality Control Review (EQCR) includes:
    1. Discussion of significant matters with the engagement partner.
    2. Review of the financial statements and proposed auditor’s report.
    3. Evaluation of conclusions reached in forming the audit opinion.
    4. All of the above
  1. For listed entity audits, the Engagement Quality Control Review (EQCR) should also consider:
    1. Independence of the engagement team.
    2. Whether appropriate consultation has taken place on contentious matters or differences of opinion.
    3. Whether documentation reflects the work performed in relation to significant judgments.
    4. All of the above
  1. The eligibility criteria for engagement quality control reviewer includes:
    1. Should have the technical qualifications to perform the role, including the necessary experience and authority
    2. Should be objective. To be objective the reviewer should not be selected by the engagement partner and should not participate in the engagement.
    3. Both A&B
    4. None
  1. Quality control policies alone do not ensure good quality work. They must be implemented effectively. Therefore, the firm must evaluate:
    1. Adherence to professional standards and regulatory/legal requirements.
    2. Whether quality control procedures have been implemented on a day-to-day basis.
    3. Whether the firm’s quality control policies and procedures are effective so that reports issued by the firm are appropriate in the circumstances.
    4. All of the above

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