DENETİM - Deneme Sınavı - 5

The evidence to be collected by the auditor is divided into two according to the source. These are evidence from the accounting records and supporting evidence. As is known, the accounting record environment within the enterprise refers to all the accounting information available in the enterprise. As an example of the audit evidence in the accounting recording environment; spreadsheet, journal, ledger, auxiliary ledger, accounting handbook, calculations, electronic funds transfer records, cost distributions and reconciliations can be shown. The accounting information available in the accounting record environment is the evidence available to the auditor. This information forms the basis of the financial statements of the client business and it is mandatory to audit these audit evidences. However, this evidence cannot be considered to be completely reliable. Therefore, the auditor has to investigate the reliability of this evidence. This research is done by collecting supporting evidence. While some of the supporting evidence is obtained from the client’s business, a large portion of it is obtained from those outside the business. The reliability of evidence from people outside the business is very high. The correct answer is A.

Analytical Evidence  is for auditors to compare the data of the audited company with the data of previous years or the data of similar enterprises in the sector and to investigate the relationships between them. The answer is C.

A form audit is a way of auditing to investigate the conformity of accounting held in an enterprise in terms of form. In the audit of the form, it is investigated whether the events that cause a value
movement in the enterprise are reflected in the accounting records based on documents and whether the accounting is kept in accordance with the formal conditions of the generally accepted accounting principles. The answer is E.

Main audit processes are comparison process, audit of the amount transfers, the arithmetic examination and the document review. The answer is C.

Document review is the auditor’s examination of internal or external records and documents, which form the basis of the subject being audited and are kept in paper, electronic or other media. Document review is the opposite of the technique of re-monitoring the recording system. The answer is B.

Analytical procedures are the research and review of meaningful relationships that are considered to exist between the data in the financial statements. The answer is D.

Logicality Analysis (Rationality Tests) is conducted to estimate other data as a variable by considering some data belonging to the business. The answer is C.

There are four main phases in an audit process. These phases are:

Common examples of contingent liabilities are; pending litigation, income tax disputes, guarantees, and warranty payable etc.

Auditors perform final evaluation procedures before preparing the audit report. For this purpose, the auditor performs final analytical procedures, reviews the sufficiency of evidence and working papers, and evaluates the company’s ability of going concern. At this stage the auditor also asks for a letter of representation from the management of the company.

In Turkey, Independent Audit Regulation states that the audit institutions have to keep their commercial books, the audit reports issued, including those kept in electronic, magnetic, and similar environments, together with their attachments, and all documents related to the audit work and the quality control system for a period of ten years.

ISA 560 Subsequent Events requires that all events up to the date of the auditor’s report should be identified and included in the financial reports accordingly.

ISA 550 Related Parties suggests that transactions with these parties may give rise to a high risk of material misstatement.

ISA 700 requires the auditor’s report to be dated no earlier than the date on which the auditor has obtained sufficient appropriate evidence on which to base the auditor’s opinion on the financial statements.

International Standard on Auditing (ISA) 570 Going Concern, emphasizes that the auditor must examine the appropriateness of the going concern assumption.

According to ISA 580, Management representation letter has three main purposes

The responsibilities of auditors and reviewers about quality control procedures are explained in International Standard on Auditing (ISA) 220 Quality Control for an Audit of Financial Statements.

The assertions regarding the types of transactions and events in the period under audit are as
follows:

The answer is E.

Permanent file is the file in which the auditor puts the working papers to be used not only in the
relevant audit year, but also in the following years. In other words, these are the files where the working papers containing the information used in more than one period are kept. These types of files provide serious preliminary preparation and convenience in subsequent audits. The following documents can be given as examples of the main working papers to be in the permanent file:
• Information About Customer Business,
• Information About Industry of the Customer Enterprise,
• Enterprise’s Articles of Association,
• Organization Chart,
• Contracts,
• Deals,
• Attorney,
• Signature Example (Circus),
• Statistical Information,
• Account Plan,
• Accounting Handbook,
• Board of Directors Meeting Minutes an
• Annual Reports,
• Copies of Tax Declarations,
• Financial Statements for Previous Years,
• Audit Reports for Previous Years,
• Files of Information Provided to the Public Oversight Board.

The answer is C.

Sampling risk can occur in four different ways: alpha risk, beta risk, false rejection risk, and false
acceptance risk. Alpha risk, beta risk, false rejection risk and false acceptance risk can be briefly
defined as follows (Selimoğlu, 2012):
• Alpha Risk; although the internal control system in the business is reliable enough, the independent auditor concludes that the internal control system is not reliable by looking at the results obtained from the sample.
• Beta Risk; although the internal control system in the enterprise is not reliable enough, the
independent auditor concludes that the internal control system is reliable by looking at the results obtained from the sample.
• Wrong Rejection Risk; although the sample results selected by the auditor indicate that there is
a material error in the remaining accounts, there is a risk of no material errors in the remaining
accounts.
• Wrong Acceptance Risk; although the sample results chosen by the auditor indicate that there
is no material error in the remaining accounts, there is a risk of material errors in the remaining
accounts.

The answer is E.