DENETİM - Deneme Sınavı - 4

The five steps to develop audit objectives are:

The answer is B.

Six management assertions related to classes of transactions and events and related disclosures, for the period under audit are:

Occurrence is one of the management assertions related to account balances and related disclosures, at the period end. The answer is A.

Management assertions tested for income statement transactions and balance sheet items are the same, except for cut-off and rights and obligations. Cut-off is tested only for income statement transactions, whereas rights and obligations is tested for balance sheet items. The answer is C.

Risk Assessment Procedures is an audit procedure to assess the risk that material misstatement exists. They are used to determine the type and amount of further audit procedures necessary to form an opinion on the fairness of the financial statements. The answer is A.

During the creation of the overall audit plan, the first stage of the audit process, and the preparation of the audit program, auditors use the following five types of audit tests to determine whether the financial statements are prepared fairly:
• Risk assessment procedures
• Tests of controls
• Substantive tests of transactions
• Substantive analytical procedures
• Tests of details of balances

Tests of controls are audit procedures to test the effectiveness of controls in support of a reduced assessed control risk. The answer is B.

Tests of details of balances are specific procedures intended to test for monetary misstatements in the balances in the financial statements. The answer is E.

All statements, expect for in the fourth and last phase, the auditor performs tests of controls to determine the effectiveness of the internal control system. The answer is C.

Auditors follow a four-step approach to reduce assessed control risk (Arens, 2017b):

The answer is B.

If the financial statements have been prepared using the going concern basis of accounting but,
in the auditor’s judgment, management’s use of the going concern basis of accounting in the financial statements is inappropriate, the requirement in paragraph 21 for the auditor to express an adverse opinion applies regardless of whether or not the financial statements include disclosure of the inappropriateness of management’s use of the going concern basis of accounting. The answer is A.

A material misstatement of the financial statements may arise in relation to: 
a. The appropriateness of the selected accounting policies;
b. The application of the selected accounting policies; or
c. The appropriateness or adequacy of disclosures in the financial statements.

The answer is E.

ISA 701 deals with the auditor’s responsibility to communicate key audit matters in the auditor’s
report. The answer is D.

The auditor shall express a qualified opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are material, but not pervasive, to the financial statements. The answer is C.

The auditor’s inability to obtain sufficient appropriate audit evidence (also referred to as a limitation on the scope of the audit) may arise from:
a. Circumstances beyond the control of the entity;
b. Circumstances relating to the nature or timing of the auditor’s work; or
c. Limitations imposed by management. The answer is C.

The auditor shall disclaim an opinion when the auditor is unable to obtain sufficient appropriate
audit evidence on which to base the opinion, and the auditor concludes that the possible effects
on the financial statements of undetected misstatements, if any, could be both material and
pervasive. The answer is D.

When the auditor modifies the audit opinion, the auditor shall use the heading “Qualified Opinion,”
“Adverse Opinion,” or “Disclaimer of Opinion,” as appropriate, for the Opinion section. The answer is A.

We are more likely to see "In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at 31 December 2020, and its financial performance and its cash flows for the year then ended in accordance with Turkish Financial Reporting Standards (TFRS)./Turkish Accounting Standards (TAS)." in report expressing an unmodified opinion. The answer is C.

Disclaimer of Opinion report should include:

The answer is B.

Basis of the opinion, Responsibilities of Management and Those Charged with Governance for the Financial Statements and Auditor’s Responsibilities for the Audit of the Financial Statements are found in all reports despite the opinion it expresses. Material Uncertainty Related to Going Concern and Key Audit Matters (for Listed Entities) are listed only in reports in which the opinion is adverse or unmodified. The answer is D.