Preview Questions External Auditor | Role Specific Skill

Question 1: How should an external auditor handle situations where management refuses to provide access to certain documents during the audit?

Which action should you take?

Choose only one option

Document the refusal but issue an unqualified opinion

Proceed with the audit without addressing the refusal

Accept the refusal if it does not affect the audit's scope

Mention the refusal in the audit report and consider the impact on the audit opinion

Question 2: What approach should an external auditor take when investigating a sharp decline in the profitability of a BFSI institution?

Which action should you take?

Choose only one option

Investigate changes in operational costs and revenue sources

Review the institution's capital adequacy ratio

Compare the decline with industry-wide profitability trends

Analyze fluctuations in market interest rates and their impact

Question 3: What is the correct sequence for documenting audit findings in BFSI?

Which action should you take?

Choose only one option

Issue summary ? Risk identification ? Supporting evidence

Supporting evidence ? Risk identification ? Issue summary

Risk identification ? Issue summary ? Supporting evidence

Risk assessment ? Issue identification ? Evidence summary

Question 4: In auditing for compliance with the Anti-Bribery and Corruption Act (ABC), what should an auditor prioritize?

Which action should you take?

Choose only one option

Reviewing the bank's anti-bribery policies and employee training programs

Focusing only on the bank's financial statements

Evaluating the impact of bribery on the bank's profit margins

Reviewing the bank's marketing and advertising strategies

Question 5: In BFSI financial audits, what is the most effective approach for testing the accuracy of the bank's investment portfolio valuation?

Which action should you take?

Choose only one option

Re-calculating the fair value of securities based on market prices

Verifying the bank's investment policy

Reviewing the bank's risk management reports

Comparing portfolio returns with the industry average

Question 6: When assessing the risk of financial misstatements in a bank's financial statements, which of the following factors would be most critical?

Which action should you take?

Choose only one option

The complexity and volume of transactions processed by the bank

The bank's profitability over the last quarter

The age of the bank's financial statements

The size of the bank's assets and liabilities