DENETİM - Deneme Sınavı - 1

Auditing standards provide a measure of audit quality and the objectives to be achieved in an audit.

IFAC is the global organization for the accountancy profession, comprising more than 175 member and associate organizations in 130 countries and jurisdictions, representing nearly 3 million professional accountants.

The KGK is responsible for achieving an effective public oversight in Turkey. The KGK is also responsible for setting standards that ensure the preparation and auditing of financial statements in compliance with international standards.

The International Public Sector Accounting Standards Board develops standards, guidance, and resources for use by public sector entities around the world for preparation of general purpose financial statements.

Generally accepted auditing standards have been approved and adopted by the membership of the AICPA

Adequacy of Onformative Disclosures is described as reporting standard in Generally Accepted Auditing Standards

The auditor’s responsibility is to form an opinion on the financial statements. Auditor’s report indicates the degree of the responsibilities. The auditor’s report shall be in writing. The auditor’s opinion varies according to the importance of the violation in the reporting standards and its impact on the financial statement. This called Expression of Opinion on Financial Statements in GAAP

Professional accountants must be honest and straightforward during their work in all professional and business relationships at all times. This is called integrity in GAAP

A professional accountant shall comply with the principle of objectivity, which requires an accountant not to compromise professional or business judgment because of bias, conflict of interest or undue influence of others.

The firm shall establish a monitoring process designed to provide it with reasonable assurance that the policies and procedures relating to the system of quality control are relevant, adequate, and operating effectively. Policies and procedures related with monitoring are ensuring harmony with professional standards and legal and regulatory requirements and the system of quality control has been appropriately designed and effectively implemented.

The auditor must meet the following requirements to be successful at the risk assessment phase.

The right answer is B.

Audit risk components, or in other words, the audit risk model includes three different types of risks. These are a) Inherent Risk (IR), b) Control Risk (CR) and c) Detection Risk (DR). Audit risk is found by multiplying these three types of risk probabilities. According to ISA 315; The inherent risk and control risk related to the client’s business from these risks is called “risk of material misstatement”. The answer is B .

The auditor ‘s actions can be classified in four steps during the audit process. That are like the following:

Accepting the engagement and arrangement, Audit planning, Performing audit procedures, and Reportingof findings. The conventional audit approach was discarded at the beginning of the 2000s, with the advent of large-scale financial scandals (Enron and Worldcom in the US, Parmalat in Italy and Imar Bank in Turkey), and a ‘risk-based’ approach began to be embraced. Therefore, the audit process turns into another three phases in this approach (also referred to as 3R Audit). These are: Risk Assessment, Responding to the risk, and Reporting.  The Answer is A

Frauds in businesses are classified into three groups:

  The answer is A

Planning will help the auditor gather sufficient and appropriate evidence to form an opinion, perform the audit at an affordable cost, and avoid misunderstandings about the business. Planning is a continuous and repetitive process. The answer is A

The matters to be considered in the creation of audit strategy are: Scope of the engagement: Specific features of the sector, financial reporting framework, places to visit, utilization of the internal auditor’s work, the impact of information technologies, relations with group companies. Audit schedule and communication structure: Reporting times of the client business, meeting times with business representatives and team members, meetings between the team members and third parties. Identification of important factors related to the audit: the level of materiality, highriskareas, internal control, the auditor’ s professional skepticism, the results of previous audits, and the provision of other services. The answer is E.

Control is an issue that comes before the audit and should be considered more broadly.

The answer is A

Control Risk: CR is a function of the effectiveness of the internal control designed for financial reporting. It is the auditor’s assessment of the probability of failure in the client’s business internal controls to prevent or reveal the misstatements in an account balance or class of transaction that exceed the acceptable limit.

Inherent Risk: It is the evaluation of the probability of material misstatements in an account balance or a class of transaction, regardless of the effectiveness of the internal control structure. 

Detection Risk: The probability of an auditor to miss misstatements in the financial statements of the client’s business with the collected audit evidence (regarding the account balances) is called “Detection Risk” or “Planned Detection Risk”.

The answer is B .

Risk Assessment: All organizations face risks threatening to reach its targets. All internal and external risks should be evaluated. Prerequisite for risk assessment is the determination of different but interrelated targets within the business. Risks should be assessed and managed accordingly.

Setting clear goals is essential to recognize, evaluate, and respond to risks. Creating a set of goals can be quite formal or informal. Goals should be set in the context of an organizational strategy, considering the strengths and weaknesses, risks, and opportunities of the company.

Internal controls help reduce risks in achieving the goals set in a business but do not eliminate all risks. The auditor collects information on how management assesses risks specifically for financial reporting, through questionnaires and interviews. The answer is D.

Internal Control Components

Control environment,

Risk assessment,

Control activities,

Information and communication,

Monitoring activities. The answer is C