This is a ZAI Quiz based on ACCA FAU (Foundations in Audit). Each question includes four multiple choice options, and the answers are provided at the bottom.
ZAI Quiz: Foundations in Audit (FAU)
1. What is the main objective of an external audit?
A) Detect all frauds and errors
B) Express an opinion on the financial statements
C) Prepare financial statements
D) Manage company risks
2. Which of the following is an example of audit evidence?
A) Board meeting minutes
B) Auditor’s personal opinion
C) Management’s assurances
D) The company’s mission statement
3. What is professional scepticism in auditing?
A) The tendency to believe management’s assertions
B) Maintaining a questioning mind and critical assessment of audit evidence
C) Following audit procedures without question
D) Avoiding contact with the client
4. Which of the following is a responsibility of those charged with governance?
A) Performing audit procedures
B) Reviewing internal audit reports
C) Preparing audit documentation
D) Giving the audit opinion
5. What does the term audit risk refer to?
A) The chance the auditor will be sued
B) The risk that financial statements are misstated and the auditor fails to detect it
C) The risk of the business not being profitable
D) The likelihood of audit delay
6. Which of the following is a limitation of an audit?
A) Audit is mandatory
B) Auditors are biased
C) Use of sampling and judgment
D) Financial statements are accurate
7. What is the role of internal audit?
A) To give an opinion on financial statements
B) To monitor internal controls and assist in risk management
C) To prepare the financial statements
D) To act as external auditors
8. What is the audit trail?
A) The auditor’s travel history
B) The company’s decision-making process
C) A record of transactions from source documents to financial statements
D) A list of company employees
9. Why is independence important for auditors?
A) To ensure higher fees
B) To build rapport with the client
C) To provide an unbiased opinion
D) To avoid audit documentation
10. What is materiality in the context of auditing?
A) The relevance of audit tools
B) The size or nature of an item that may affect the decisions of users of the financial statements
C) The quantity of documentation
D) The size of the audit team
Answers
- B) Express an opinion on the financial statements
- A) Board meeting minutes
- B) Maintaining a questioning mind and critical assessment of audit evidence
- B) Reviewing internal audit reports
- B) The risk that financial statements are misstated and the auditor fails to detect it
- C) Use of sampling and judgment
- B) To monitor internal controls and assist in risk management
- C) A record of transactions from source documents to financial statements
- C) To provide an unbiased opinion
- B) The size or nature of an item that may affect the decisions of users of the financial statements
