ISA 265 Communicating deficiencies in internal control MCQs

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on reddit
Share on whatsapp

SHARE THIS

ISA 265 Communicating Deficiencies in Internal Control to Those Charged with Governance and Management requires the auditor to Communicate any deficiencies
ISA 265, Communicating deficiencies in internal control to those charged with governance and management MCQs

ISA 265, Communicating deficiencies in internal control to those charged with governance and management

ISA 265 Communicating Deficiencies in Internal Control to Those Charged with Governance and Management requires the auditor to Communicate any deficiencies that are of sufficient importance to merit management’s attention to management. Here on MCQs.club we have prepared easy Multiple-Choice Questions (MCQs) on ISA 265 revised IFAC, the summary of ISA 265, these MCQ are the basis for conclusion for ISA 265. These on ISA 265 communicating deficiencies are useful for Business management exams, Professional accountancy exams and Competitive exams.

  1. ISA 265 Communicating Deficiencies in Internal Control to Those Charged with Governance and Management requires the auditor to:
    1. Communicate any deficiencies that are of sufficient importance to merit management’s attention to management
    2. Communicate significant deficiencies to those charged with governance.
    3. Both A&B
    4. None
  1. Deficiencies occur when:
    1. A control is designed, implemented or operated in such a way that it is unable to prevent, or detect and correct misstatements in the financial statements on a timely basis
    2. A control necessary to prevent, or detect and correct, misstatements in the financial statements on a timely basis is missing.
    3. Both A or B
    4. None
  1. A significant deficiency is one which merits the attention of those charged with governance.
    1. True
    2. False
  1. The differentiation between (not significant) deficiency and significant deficiency is a matter of professional judgement for the auditor. ISA 265 provides guidance in making this judgement, such as:
    1. A deficiency or combination of deficiencies that either have resulted in, or could result in, a material misstatement, are almost certainly significant
    2. Consider the subjectivity and complexity of determining estimated amounts, such as fair value accounting estimates
    3. Both A&B
    4. None
  1. Examples of matters the external auditor should consider in determining whether a deficiency in internal controls is significant include:
    1. The likelihood of the deficiencies leading to material misstatements in the financial statements in the future.
    2. The subjectivity and complexity of determining estimated amounts.
    3. The importance of the controls to the financial reporting process.
    4. All of the above
  1. When the auditor reports deficiencies, it should be made clear that:
    1. The report is not a comprehensive list of deficiencies, but only those that have come to light during normal audit procedures.
    2. The report is for the sole use of the company.
    3. No disclosure should be made to a third party without the written agreement of the auditor.
    4. No responsibility is assumed to any other parties.
    5. All of the above
  1. Management letter – A management letter is a report typically presented in columnar fashion detailing weaknesses observed in the client’s system of internal controls.
    1. True
    2. False
  1. The communication of significant deficiencies must be in writing and is required to cover:
    1. A description of the deficiencies and an explanation of their potential effects.
    2. Sufficient information to allow those charged with governance and management to understand the context of the communication.
    3. Both A&B
    4. None

—more to come soon—

Leave a Reply

Sign up for Free MCQs

Success is awaiting for you

JOIN US

MCQsClub login

Welcome to the Club

Log in to continue. IT'S FREE

OR