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CA Final Auditor Independence — practice questions

Explore 73 free Auditor Independence questions in CA Final Auditing. Open each question or exercise to read its content, reference answers and available explanation.

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Auditor Independence questions and exercises with answers

Showing questions 1–30 of 73.

Which principle is called the cornerstone of the auditing profession?Read the answer and worked solution →Which of these is barred by the basic independence standards?Read the answer and worked solution →Which role is incompatible with auditor independence?Read the answer and worked solution →How many categories of threats to independence does the IESBA Code identify?Read the answer and worked solution →Unlimited access to all company information is secured by which type of independence?Read the answer and worked solution →The auditor's freedom to disclose to the public what should be disclosed is which independence?Read the answer and worked solution →Real independence is also described as independence of what?Read the answer and worked solution →Heavy reliance on one client's fee income mainly threatens what?Read the answer and worked solution →Why may a very low audit fee harm audit quality?Read the answer and worked solution →Substantial non-audit fees compared with audit fees raise what concern?Read the answer and worked solution →Which 2002 US law responded to firms selling both auditing and consulting services?Read the answer and worked solution →For listed-entity audits, the IESBA Code normally requires key audit partner rotation after at most how many years?Read the answer and worked solution →Rotation of the key audit partner mainly addresses which threat?Read the answer and worked solution →Which Sarbanes-Oxley section is titled Audit Partner Rotation?Read the answer and worked solution →For US public company audits as described, the lead partner must rotate every how many years?Read the answer and worked solution →A recurring external assessment of an audit firm's quality control system is called what?Read the answer and worked solution →Peer review of a firm auditing non-issuers is required how often?Read the answer and worked solution →Australia introduced mandatory audit partner rotation in 2004 under which legislation?Read the answer and worked solution →The EU Audit Directive of 17 May 2006 requires statutory audits to follow what?Read the answer and worked solution →A legally required review of the accuracy of a company's financial statements is a what?Read the answer and worked solution →What level of assurance does a financial audit seek to provide?Read the answer and worked solution →In a US integrated audit, the auditor also opines on what besides the financial statements?Read the answer and worked solution →Which auditors are employed by the organisations they audit?Read the answer and worked solution →An external auditor opines on misstatements arising from what causes?Read the answer and worked solution →Which Companies Act 2013 section requires listed companies to form an Audit Committee?Read the answer and worked solution →Under Rule 6 of the 2014 Rules, a public company needs an Audit Committee at what paid-up capital?Read the answer and worked solution →Which is a typical responsibility of an audit committee?Read the answer and worked solution →A qualifying US audit committee must be composed of which kind of directors?Read the answer and worked solution →To stay independent, to whom should internal auditors report directly?Read the answer and worked solution →Before the 1970s, US audit firms were barred from doing what?Read the answer and worked solution →

Worked practice questions

Which principle is called the cornerstone of the auditing profession?

  1. Fee maximisation
  2. Audit sampling
  3. Audit rotation
  4. Auditor independence
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Correct answer: D. Auditor independence

Public trust in the profession rests on auditors being free from interests in the client, so independence is its cornerstone.

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Which of these is barred by the basic independence standards?

  1. Using audit sampling
  2. Auditing their own work
  3. Reporting to owners
  4. Planning the audit
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Correct answer: B. Auditing their own work

Reviewing work the auditor produced would remove objectivity, so self-review is prohibited.

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Which role is incompatible with auditor independence?

  1. Gathering audit data
  2. Testing key controls
  3. Reporting an opinion
  4. Managing the client
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Correct answer: D. Managing the client

An auditor who takes part in managing the client would end up judging their own decisions.

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More Auditing topics

Auditor's ReportOverview of Audit of Public Sector UndertakingsInternal AuditStandards on Auditing and Professional EthicsInternational Ethics Standards Board for AccountantsRisk Assessment and Internal ControlSpecial Features of Audit of Banks and Non-Banking Financial CompaniesAuditor's Report on Financial Statements