i) Which of the following statements correctly explains the responsibility of the external auditor? A. Responsibility to provide reasonable assurance that the financial statements are free from material error or misstatement. B. Responsibility for identifying and correcting any errors or misrepresentations in the financial statements. C. Responsibility for the reliability of the information that financial statements provide. D. Responsibility to prepare financial statements.
(i) Which of the following statements correctly explains the responsibility of the external auditor?
A. Responsibility to provide reasonable assurance that the financial statements are free from material error or misstatement.
B. Responsibility for identifying and correcting any errors or misrepresentations in the financial statements.
C. Responsibility for the reliability of the information that financial statements provide.
D. Responsibility to prepare financial statements.
(ii) Operational controls are designed to prevent failures in operational procedures caused by:
i. Machine breakdown and human error
ii. Failures in the performance of systems and weaknesses in procedures.
iii. Poor management
iv. Risks of errors or fraud in accounting systems and accounting and finance activities.
A. i and ii only
B. i, ii and iii only
C. i, ii and iv only
D. All of the above
(iii) Risk tolerance refers to
A. The amount of risk the company is prepared to accept in order to achieve its financial objectives.
B. The amount of risk the company could accept without a serious threatto its financial stability.
C. The level of risk a company (or any other organisation) is willing to take in the pursuit of its objectives.
D. The combination of the desire to take on risk in order to ontain a financial return and its risk capacity.
(iv) The main objective of an external audit is to
A. Protect the interests of shareholders
B. Detect fraud and irregularities in the company's performance.
C. Assess the effectiveness of the company's performance
D. Provide assurance on the director's statement about the financial statements
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