CGA-CANADA
AUDITING 2 EXAMINATION
March 2005
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.

An attitude of “professional scepticism” is necessary if a CGA is to perform an audit engagement with due care. Which of the following best describes how a CGA may display an attitude of “professional scepticism” when performing an audit engagement?
1)
2)
3)
4)

By assuming that management is dishonest in the absence of evidence to the contrary
By not allowing clients’ staff to assist in the performance of an audit
By rejecting all management assertions in the absence of supporting evidence
By questioning all material assertions made by management

b. Which of the following steps or modifications to an audit program is likely to be the most appropriate if an auditor assesses the risk of management fraud to be relatively high?
1)
2)
3)
4)
c.

Performing relatively less audit work at interim dates
Placing greater reliance on management’s representations
Performing less extensive tests of internal controls
Assigning less experienced personnel to the engagement

Generalized audit software, such as IDEA and ACL, can be used in a variety of ways during an audit engagement. Which of the following audit steps is a CGA most likely to perform using generalized audit software?
1)
2)
3)
4)

Test compliance with a client’s internal controls.
Implement a strategic systems-based audit of financial statements.
Select a