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Which of the following is not a change that affects consistency and, therefore, does not require an emphasis of matter paragraph?


A) Change in an estimate, such as a decrease in the life of an asset for depreciation purposes.
B) Correction of errors by changing from non- IFRS to IFRS.
C) Change in accounting principle, such as a change from LIFO to FIFO.
D) Change in reporting entity, such as the inclusion of an additional company in combined financial statements.

E) A) and C)
F) None of the above

Correct Answer

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Match each of the definition with the following terms -The recording, classifying, and summarizing of economic events in a logical manner for the purpose of providing financial information for decision making.


A) Accounting
B) Assurance service
C) Attestation service
D) Audit evidence
E) Audit of historical financial statements
F) Audit report
G) Compliance audit
H) Forensic audit
I) Independent auditors
J) Information asymmetry
K) Information risk
L) Internal auditors
M) Internal control over financial reporting
N) Operational audit
O) Review of historical financial statements
P) Sarbanes-Oxley Act

Q) G) and I)
R) K) and L)

Correct Answer

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Match each of the definition with the following terms -A type of assurance service in which an auditing firm issues a report about the reliability of an assertion that is the responsibility of another party.


A) Accounting
B) Assurance service
C) Attestation service
D) Audit evidence
E) Audit of historical financial statements
F) Audit report
G) Compliance audit
H) Forensic audit
I) Independent auditors
J) Information asymmetry
K) Information risk
L) Internal auditors
M) Internal control over financial reporting
N) Operational audit
O) Review of historical financial statements
P) Sarbanes-Oxley Act

Q) C) and G)
R) A) and D)

Correct Answer

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In the Arab world, requirements for the formal education, practice experience, and continuing education of public accounts are set by:


A) national associations of accountants and auditors.
B) government ministries.
C) either of A and B.
D) neither A or B.

E) B) and D)
F) C) and D)

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The International Standards on Auditing are organized into six main parts. List these parts.

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• General principles and responsibilitie...

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Whenever an auditor issues a qualified report, he or she must use the term 'subject to' in the opinion paragraph.

A) True
B) False

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The purpose of the introductory paragraph in the standard unmodified report is:


A) to identify the financial statements audited and the dates and time periods covered by the report.
B) to indicate the auditor followed applicable audit standards.
C) to identify that the type of opinion issued is unmodified.
D) to indicate all the financial statements are in accordance with IFRS or local accounting standards.

E) B) and C)
F) A) and D)

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Match each of the definition with the following terms -The concept that the manager generally has more information about the True financial position, results of operations, and cash flow of the company than the absentee owner.


A) Accounting
B) Assurance service
C) Attestation service
D) Audit evidence
E) Audit of historical financial statements
F) Audit report
G) Compliance audit
H) Forensic audit
I) Independent auditors
J) Information asymmetry
K) Information risk
L) Internal auditors
M) Internal control over financial reporting
N) Operational audit
O) Review of historical financial statements
P) Sarbanes-Oxley Act

Q) A) and H)
R) A) and C)

Correct Answer

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For the audit of tax returns by a local tax authority, the criteria for evaluating the information are found in the international tax law.

A) True
B) False

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Which one of the following is not one of the three general standards in the GAAS framework?


A) Maintain independence of mental attitude.
B) Have adequate training and proficiency.
C) Ensure proper planning and supervision.
D) Exercise due professional care.

E) None of the above
F) B) and C)

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Describe an auditor's responsibilities in respect of the information in documents accompanying audited financial statements.

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The information in the annual reports an...

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ISAs, GAAS, and SASs should be looked upon by practitioners as:


A) minimum standards of performance that must be achieved on each audit engagement.
B) benchmarks to be used on all audits, reviews, and compilations.
C) maximum standards that denote excellent work.
D) ideals to work towards, but which are not achievable.

E) A) and B)
F) B) and C)

Correct Answer

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The Egyptian Standards on Auditing (ESA) are based on the ISAs and translated into Arabic.

A) True
B) False

Correct Answer

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Match each of the definition with the following terms -Any information used by the auditor to determine whether the information being audited is stated in accordance with established criteria.


A) Accounting
B) Assurance service
C) Attestation service
D) Audit evidence
E) Audit of historical financial statements
F) Audit report
G) Compliance audit
H) Forensic audit
I) Independent auditors
J) Information asymmetry
K) Information risk
L) Internal auditors
M) Internal control over financial reporting
N) Operational audit
O) Review of historical financial statements
P) Sarbanes-Oxley Act

Q) F) and N)
R) G) and P)

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In the Arab world, the review of the quality of the audit provided by auditing firms is undertaken by the international CPA networks.

A) True
B) False

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When there is a scope limitation in an audit, the audit report will be unmodified, qualified, or adverse, depending on the materiality of the scope limitation.

A) True
B) False

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Assume you are the partner in charge of the 2012 audit of Bashir Corporation, a private company. The audit report has not yet been prepared. In each independent situation following, indicate the appropriate action to be taken. -You have substantial doubt about Bashir's ability to continue as a going concern.


A) Issue a standard unmodified audit report.
B) Issue an qualified report in the form of a qualification of both the scope and opinion.
C) Issue an qualified report in the form of a qualification of the opinion only.
D) Issue an unmodified opinion with an emphasis of a matter paragraph.
E) Issue an unmodified opinion with modified wording.
F) Issue an adverse opinion.
G) Disclaim an opinion.

H) A) and E)
I) C) and E)

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An auditor provides a moderate level of assurance for reviews of interim financial statements so the same level of evidence is needed as for a full audit.

A) True
B) False

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Discuss the role of the forensic auditor and give some examples of situations that they might investigate.

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Forensic auditors are trained in detecti...

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The Auditing Standards Board (ASB) has no plans to converge U.S. GAAS with the ISAs and align its agenda with the IAASB.

A) True
B) False

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