Accounting mcqs

The client changed method of depreciation from straight line to written down value method. This has been disclosed as a note to the financial statements. It has an immaterial effect on the current financial

The client changed method of depreciation from straight line to written down value method.

Qualified opinion

Disclaimer of opinion

Adverse opinion

Unqualified opinion

The auditor has serious concern about the going concern of the company. It is dependent on company’s obtaining a working capital loan from a bank which has been applied for

The auditor has serious concern about the going concern of the company.

unqualified opinion with reference to notes to the accounts

qualified opinion

unqualified opinion

disclaimer of opinion

Which of the following statements is not correct about materiality?

Which of the following statements is not correct about materiality?

Materiality is a relative concept

Materiality judgments involve both quantitative and qualitative judgments

At the planning state, the auditor considers materiality at the financial statement level only

Auditor’s consideration of materiality is influenced by the auditor’s perception of the needs of an informed decision maker who will rely on the financial statements

You have been proposed as auditor of a company. What is the first step that you should take?

You have been proposed as auditor of a company. What is the first step that you should take?

Obtain the existing auditor’s working papers

Obtain the client’s permission to communicate with the existing auditor

Obtain a copy of the company’s most recent board minutes

Obtain a copy of the existing auditor’s letter of engagement

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