ISA 230 – Audit Documentation Online Test

ISA 230 Audit Documentation Practice Questions
To know correct answers of the quiz with explanations simply hover or click the multiple choices under each question. For “fill in the blanks” style questions simply hover mouse pointer above the blank or click it.

If you find it difficult to answer the questions then read our free summary of ISA 230 Audit Documentation

1. Which of the following is NOT a purpose of audit documentation?


[tippy title=”Making audit engagement efficient” width=”300″]Wrong!
[/tippy]

[tippy title=”To make record of audit activity available to general public” width=”300″]Correct!
[/tippy]

[tippy title=”To supervise junior team members” width=”300″]Wrong!
[/tippy]

[tippy title=”For quality control evaluations” width=”300″]Wrong!
[/tippy]

2. The main purpose of audit file is to provide evidence that:


[tippy title=”Sufficient audit evidence is obtained” width=”300″]Wrong!
[/tippy]

[tippy title=”Engagement letter is duly signed” width=”300″]Wrong!
[/tippy]

[tippy title=”record the interpretations as result of audit procedures” width=”300″]Correct!
[/tippy]

[tippy title=”Help client in borrowings if needed” width=”300″]Wrong!
[/tippy]

3. Audit documentation should be prepared:


[tippy title=”Sufficient audit evidence is obtained” width=”300″]Wrong!
[/tippy]

[tippy title=”after auditor has singed the auditor’s report” width=”300″]Wrong!
[/tippy]

[tippy title=”after financial statements are approved” width=”300″]Wrong!
[/tippy]

[tippy title=”During audit engagement” width=”300″]Correct!
Audit documentation prepared after the engagement is complete will not be as accurate as prepared during the engagement.[/tippy]

4. The way audit documentation is prepared depends upon number of factors.


However, which of the following does not affect the documentation process?

[tippy title=”Audit methodology used” width=”300″]Wrong!
Audit methodology affects the scope and extent of audit documentation. Complex the methodology more documentation is needed[/tippy]

[tippy title=”Risk of material misstatement” width=”300″]Wrong!
Higher the risk of material misstatement more the audit documentation is usually carried out.[/tippy]

[tippy title=”Experience of auditor” width=”300″]Correct!
Nature, scope and extent of audit documentation has nothing to do with the experience of auditor.[/tippy]

[tippy title=”Number of exceptions identified” width=”300″]Wrong!
[/tippy]

5. The audit documentation may be kept in paper form, electronic form or any media deemed fit.


[tippy title=”True” width=”300″]Correct!
[/tippy]

[tippy title=”False” width=”300″]Wrong!
[/tippy]

6. Audit documentation consists of many different types of documents, memos and drafts that were important in conducting audit engagement and includes:


[tippy title=”Duplicates” width=”300″]Wrong!
[/tippy]

[tippy title=”Notes reflecting preliminary thinking” width=”300″]Wrong!
[/tippy]

[tippy title=”Superseded drafts” width=”300″]Wrong!
[/tippy]

[tippy title=”All of the above” width=”300″]Correct!
[/tippy]

7. Oral descriptions if not documented cannot supplement the documented facts, however it can be used:


[tippy title=”to clarify documented information” width=”300″]Correct!
[/tippy]

[tippy title=”to complement hidden information” width=”300″]Wrong!
[/tippy]

[tippy title=”to replace circumstances not present at engagement acceptance time” width=”300″]Wrong!
[/tippy]

[tippy title=”to keep client’s information confidential” width=”300″]Wrong!
[/tippy]

8. If laws and regulations other than ISA 230 Audit Documentation does not require documentation of audit activity then auditor can skip the audit documentation.


[tippy title=”True” width=”300″]Wrong!
If other applicable laws and regulations on audit engagement are silent or provide no guidance on audit documentation even then ISA 230 will be applicable and audit documentation is mandatory.[/tippy]

[tippy title=”False” width=”300″]Correct!
[/tippy]

9. Auditor is neither required nor it is possible that he can document each and every aspect. For example professional skepticism cannot be documented directly can be assessed by:


[tippy title=”By inquiring management if auditor was skeptic” width=”300″]Wrong![/tippy]

[tippy title=”Checking evidence that auditor has applied procedures to confirm evidence provided by management” width=”300″]Correct![/tippy]

[tippy title=”Discussing with those charged with governance if auditor has worked with them” width=”300″]Wrong![/tippy]

[tippy title=”By conducting lie detection test on junior audit team members” width=”300″]Wrong![/tippy]

10. “Completion memorandum” is summary:


[tippy title=”that contains draft of auditor’s report” width=”300″]Wrong![/tippy]

[tippy title=”issued to confirm audit is complete” width=”300″]Wrong![/tippy]

[tippy title=”document sent by management that their work is complete and now auditor can conduct his procedures” width=”300″]Wrong![/tippy]

[tippy title=”about significant matters identified during engagement and how they were resolved” width=”300″]Correct![/tippy]