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CA Final Financial Audit — practice questions

Explore 49 free Financial Audit questions in CA Final Auditing. Open each question or exercise to read its content, reference answers and available explanation.

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Financial Audit questions and exercises with answers

Showing questions 1–30 of 49.

What is the main aim of an assurance service?Read the answer and worked solution →Assurance opinions mainly reduce which kind of risk?Read the answer and worked solution →In the three-party assurance relationship of an audit, who is the practitioner?Read the answer and worked solution →What is the agreed subject matter in a company audit?Read the answer and worked solution →What do 'suitable criteria' mean in an assurance engagement?Read the answer and worked solution →How is the conclusion of an assurance engagement expressed?Read the answer and worked solution →How is an audit related to assurance services?Read the answer and worked solution →Assurance over a firm's greenhouse gas emissions would fall under which standard?Read the answer and worked solution →Why are consulting services not treated as assurance?Read the answer and worked solution →Why are agreed-upon procedures not strictly assurance?Read the answer and worked solution →A compilation engagement is not strictly assurance because it has what feature?Read the answer and worked solution →Audits are regulated under which set of standards?Read the answer and worked solution →Where is audit evidence recorded?Read the answer and worked solution →Audit evidence must be sufficient and what else?Read the answer and worked solution →Which procedure involves speaking to people inside or outside the client?Read the answer and worked solution →What are analytical procedures done to check?Read the answer and worked solution →Evidence is relevant when it is closely related to what?Read the answer and worked solution →What does direct knowledge mean as audit evidence?Read the answer and worked solution →Big data is characterized by which four features?Read the answer and worked solution →What is a key interpretation risk of big data evidence?Read the answer and worked solution →An unqualified opinion states what about the financial statements?Read the answer and worked solution →Internal auditors focus mainly on which area?Read the answer and worked solution →When should an auditor perform a test of control?Read the answer and worked solution →With weak internal controls, auditors typically lean on what?Read the answer and worked solution →Which kind of conclusion does the final audit phase rely on heavily?Read the answer and worked solution →Which pressure can limit an auditor's objectivity?Read the answer and worked solution →Which step in Phase I sets materiality?Read the answer and worked solution →How does auditing help the preparer's cost of capital?Read the answer and worked solution →External auditors may place what level of reliance on internal auditors' work?Read the answer and worked solution →Besides international standards, which basis may an audited set of statements follow?Read the answer and worked solution →

Worked practice questions

What is the main aim of an assurance service?

  1. Helping decision makers decide better
  2. Preparing the entity's tax returns
  3. Designing a new accounting system
  4. Raising capital for the business
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Correct answer: A. Helping decision makers decide better

Independent opinions improve the information that decision makers rely on, so they can choose with more confidence.

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Assurance opinions mainly reduce which kind of risk?

  1. Currency risk
  2. Market share risk
  3. Liquidity risk
  4. Information risk
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Correct answer: D. Information risk

Information risk is the risk of incorrect information, which an independent opinion lowers for the users.

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In the three-party assurance relationship of an audit, who is the practitioner?

  1. The company's board
  2. The shareholders
  3. The audit firm
  4. The stock exchange
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Correct answer: C. The audit firm

The practitioner is the independent party that assures the information, and for an audit this is the audit firm.

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How to practise

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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