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» ISA 230, Audit Documentation MCQs
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ISA 230, Audit Documentation
ISA 230 Audit Documentation, requires auditors to prepare and retain written documentation that provides a sufficient appropriate record of the auditor’s basis for the auditor’s report. Here on MCQs.club we have made easily understood Multiple-Choice Questions (MCQs) on ISA 230 Documentation, the revised ISA 230 MCQs, ISA 230 Summary. These SA 230 Audit Documentation MCQ are useful for Business management exams, Professional accountancy exams and Competitive exams.
- ISA 230 Audit Documentation, requires auditors to prepare and retain written documentation that:
- Provides a sufficient appropriate record of the auditor’s basis for the auditor’s report.
- Provides evidence that the audit was planned and performed in accordance with ISAs and applicable legal and regulatory requirements.
- Both A&B
- None
- Audit documentation –
- Assists the engagement team to plan and perform the audit
- Assists members of the engagement team responsible for supervision to direct, supervise and review the audit work.
- Enables the quality control reviews to be performed.
- Enables the external quality inspections to be performed.
- All of the above
- Documentation should be sufficient to enable an experienced auditor, with no previous connection to the audit, to understand:
- The nature, timing and extent of audit procedures performed
- The results of the procedures performed and the evidence obtained
- The significant matters arising during the course of the audit and the conclusions reached thereon
- All of the above
- Audit documentation includes:
- Planning documentation, Audit programmes
- Summary of significant matters, Written representation from management
- Checklists, Correspondence and Copies of client records.
- All of the above
- For large audits much of the knowledge of the business information may be kept on a permanent file and the audit plan may contain a summary or simply cross refer to the permanent file. Typical information on a permanent file includes:
- Names of management, those charged with governance, shareholders
- Background to the industry and the client’s business
- Copies of contract and agreements.
- All of the above
- The audit work for a specific period is kept on a current file. Typically, its sections include:
- Planning
- Performance
- Completion
- All of the above
- Audit documentation is the record of:
- audit procedures performed
- audit evidence obtained
- conclusions reached
- All of the above
- The auditor is required to document:
- discussions of all significant matters
- how any inconsistencies with the final conclusion on significant matters were resolved
- justify any departure from a basic principle or relevant procedure specified by an ISA.
- All of the above
- Preparing sufficient and appropriate audit documentation on a timely basis helps to:
- enhance the quality of the audit
- facilitate the effective review and evaluation of the audit evidence obtained and conclusions reached, before the audit report is finalised.
- Both A&B
- All of the above
- The precise contents of the audit file vary, depending on the nature and size of the client and the complexity of the audit processes required to reach a conclusion but will include:
- audit programs, analyses, summaries of significant matters
- letters of confirmation and representation
- checklists, and correspondence.
- All of the above
- It has been normal practice in the case of on-going audits to audit files such as:
- A permanent file
- A current file.
- Both A&B
- None
- Permanent file – records information that is likely to be of significance to every annual audit of that client. Examples of such information might include:
- the legal constitution of the company
- other important legal documents such as loan agreements
- a summary of the history, development and ownership of the business
- All of the above
- Current file – contains information of relevance to the current year’s audit. This is the evidence on which the conclusion of the current audit will be primarily based. Examples of the contents of a current audit file include the following:
- The final financial statements and audit report.
- A summary of audit adjustments, including those not included in the final reported figures.
- Audit planning material, control material and Audit letters
- All of the above
- The use of computer-based audit working papers has several advantages including:
- The documentation is neat, easy to read and in a standard format.
- The risk of errors in processing adjustments (updates, amendments, corrections) is reduced.
- The review process can be carried out “remotely”, without it being necessary for the review to take place at the client’s premises.
- Significant time saving may result from the automatic processing of adjustments.
- All of the above
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