What are the primary objectives of audit techniques?

Audit techniques collect and evaluate evidence.

• Ensure accurate financial reporting.

• Detect fraud and errors.

• Enhance stakeholder confidence.

Fill in the blanks: The technique of ___ involves communicating with external parties to confirm account balances.

Confirmation

How does the technique of reconciliation aid in the audit process?

Reconciliation helps identify and explain discrepancies between related items, ensuring that financial records are accurate and complete.

True or False: The principle of confidentiality requires auditors to disclose any information obtained during the audit.

False. The principle of confidentiality prohibits auditors from disclosing any information acquired during the audit without proper authority.

What is the significance of AAS 6 in the context of auditing?

AAS 6 is crucial for auditors.

• Guides risk assessment processes.

• Emphasizes internal control understanding.

• Improves audit risk evaluations.

What does test checking entail, and what are its limitations?

Test checking assesses transaction samples.

• Identifies trends in data.

• May overlook some errors.

• Depends on control system.

Riddle: I am a method that verifies the accuracy of totals and ensures no errors lurk. What am I?

Footing

Describe the role of planning in the auditing process.

Planning is crucial in auditing.

• Allocates resources effectively.

• Sets clear audit objectives.

• Defines the audit scope well.

Fill in the blank: The technique of ___ is used to graphically represent the flow of transactions through various stages.

Flow charting

What are the key principles outlined in AAS 1 regarding auditor conduct?

Key principles in AAS 1.

• Integrity ensures ethical behavior.

• Independence maintains objectivity in audits.

• Confidentiality safeguards client information.

True or False: Surprise checking allows auditors to plan their visits to ensure they hit peak operational times.

False. Surprise checking involves unannounced visits to assess accuracy without prior notice.

What is the main purpose of using distinctive tick marks in auditing?

Distinctive tick marks are used to indicate the completion of audit procedures and to differentiate between various types of checks performed.

Explain the concept of audit materiality as defined in AAS 13.

Audit materiality affects user decisions.

• It assesses financial statement impact.

• Guides auditor judgment and reporting.

• Ensures accuracy for stakeholders.

How does the use of an internal auditor's work affect the external auditor's responsibilities?

External auditors assess internal audits.

• Evaluates internal auditor's work.

• Ensures compliance with standards.

• Enhances overall audit reliability.

What does the term 'scrutiny or scanning' refer to in audit techniques?

'Scrutiny or scanning' refers to a quick examination of books of accounts to verify the correctness and completeness of recorded transactions.