December 2010 Au2 Essays

10296 Words Oct 10th, 2014 42 Pages
CGA-CANADA ADVANCED EXTERNAL AUDITING [AU2] EXAMINATION December 2010 Marks
30

Time: 4 Hours
Question 1 Select the best answer for each of the following unrelated items. Answer each of these items in your examination booklet by giving the number of your choice. For example, if the best answer for item (a) is (1), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item will not be marked. Incorrect answers will be marked as zero. Marks will not be awarded for explanations. Note:
11/2 marks each

a.

Which of the following opinions is an auditor most likely to issue when he or she found a material misstatement in a client’s opening balances during an initial audit engagement, but has
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1) 2) 3) 4) Engagement partner and the client’s chief financial officer Engagement partner and audit manager Engagement partner, audit manager, and senior auditor Engagement partner, audit manager, senior auditor, and junior audit staff members

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©CGA-Canada, 2010

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e.

Which of the following elements is most likely to be a component of a direct reporting assurance engagement? 1) 2) 3) 4) Low level of assurance Absolute assurance A written assertion Auditor independence

f.

When a material misstatement is discovered in the financial statements of a publicly traded company on which an auditor has issued an unqualified opinion, the reporting auditor should initially contact which of the following parties? 1) 2) 3) 4) The audit committee of the company The company’s major creditors The shareholders of the company The accountant’s professional association

g. The economy, efficiency, and effectiveness of an organization’s operations are most likely to be of concern to a CGA in which of the following types of engagements? 1) 2) 3) 4) A financial statement audit An operational audit A compliance audit An audit of internal control

h. Which of the following steps is a CGA least likely to take when contacted by a company that is not the CGA’s client, with a request to provide a second opinion where there is a dispute on

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