ISA 200

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. ISA 200 requires that the auditor obtains what level of assurance about whether the financial statements are free of material misstatement?

  2. ISA 200 requires the auditor to comply with ethical requirements. Which ethical principle is specifically referred to in this requirement?

  3. In exceptional circumstances, the auditor may judge it necessary to depart from the requirement of an ISA. What action should the auditor take in this situation? (i) perform alternative procedures (ii) conclude that a limitation on scope exists (iii) document the reason for the departure (iv) conclude that the objective relating to the requirement cannot be achieved

  4. Which parts of an ISA need to be understood by the auditor? (i) Objectives (ii) Requirements (iii) Introductory material (iv) Application and explanatory material

  5. According to ISA 200, what is the purpose of an audit?

  6. ISA 200 contains the following definition: 'An attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence.' What does this define?

  7. An audit is conducted on the premise that management and those charged with governance have acknowledged and understood their responsibility for: (i) the preparation of the financial statements (ii) internal controls relevant to financial reporting (iii) providing the auditor with access to all necessary information (iv) providing the auditor with unrestricted access to persons from within the entity

  8. The IAASB appreciates that the auditor of smaller entities may have specific concerns. How are these concerns addressed?

  9. Which of the following requirements is a new requirement in the Clarified ISA 200?

  10. According to ISA 200, the risk of material misstatement consists of which components?