Michael Gove audited the financial statement of Barays Co in the year 2010-11. Recently Barays Co have brought some changes in their reporting system. While auditing, Michael Gove evaluates the effect of a change in accounting principles of Barays Co.
What will be the basis of evaluating the materiality of the change?

• A. The effect of the change on total assets.
• B. Compare the change with the prior years presented.
• C. Check the current year effect of the change.
• D. Whatever basis Michael Gove considers appropriate.

Sheraton & Co places orders by telephone. When a call is received, the person receiving the order checks that the customer's credit status supports the order and that the customer's current balance is below the maximum level and then immediately inputs the order into the system.
The risk of management fraud could increase in this case for Sheraton & Co in the presence of ___________________.

• A. substantial increases in sales of Sheraton & Co
• B. Sheraton and Co's management incentive system based on sales done in a quarter
• C. improved internal control system of Sheraton & Co
• D. frequent changes in supplies by Sheraton & Co

The auditor is subject to relevant ethical requirements. Relevant ethical requirements ordinarily comprise Parts A and B of the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) related to an audit of financial statements together with national requirements that are more restrictive.
Interpretations of the IESBA Code of Professional Conduct are dominated by the concept of __________________.

• A. Acts discreditable to the profession.
• B. Compliance with standards.
• C. Accounting.
• D. Independence.

Mark Freebairn has prepared an audit report based on the audit of financial statements of Jaguar Plc. Scope paragraph of the report described that 'An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements.'
A qualified report, produced by Mark cannot take the form of a qualification of

• A. None of the opinion and scope.
• B. The opinion alone.
• C. The scope alone.
• D. Both the scope and opinion.

A payroll clerk with authorised access to the local area network (LAN) was able to update personnel files directly, independent of the application programmes.
The best control to prevent a clerk from doing this would be to

• A. Establish a security policy for the department that prohibits direct updating of data files.
• B. Use password security to authenticate users as they attempt to log on to the LAN.
• C. Restrict access to and monitor installation of software products or tools having powerful update capabilities.
• D. Restrict access to LAN workstations by such means as automatic lock-up after a predefined period of keyboard inactivity.