Question

SECTION A (Answer all 20 compulsory questions on the answer sheet provided) E. 1. Which of the following statements best describes the Agency Theory? A. B. C. A theory that recognizes the inclination of agents to act in their own interests rather than that of the principals (such as their employers) A theory that holds that the value of the audit report derives from the nature of the auditor as an independent competent professional A theory that holds that audit has a social benefit and is not a technical exercise for regulation A theory that recognizes that auditing is based on scientific logic with a rational process of observation and evaluation of evidence ta D. Which of the following statements correctly describes the principal purpose of the external audit of a company? 2. A. To assst management keep accurate accounting records B. To assist management prepare fairly presented financial statements To examine and express an opinion on the company's financial statements To prevent and detect fraud and to report this to the shareholders D. 3. Which of the following are true in relation to Corporate Governance? 1) The shareholders role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place 2) The UK Corporate Governance Code provides best practice for all FTSE 350 companies, who are required to adopt the provisions of the Code on a 'comply or explain'basis. A. 1 only B. 2 only C. Both of them D. Neither of them 4. Which of the following items in an Annual Report are included in the statutory audit? Statement of cashflow Statement of financial position Notes to the accounts Statement on accounting policies 1. 3 4. All of them 2 and 3 only 1 and 4 only 2, 3 and 4 only C. D.

what are the answers to these multiple questions

Answer 1

1. A

A theory that recognises the inclination of agents to act in their own interests rather than that of the principals (such as their employers) is described as the Agency Theory.

2. C

The principal purpose of the external audit of a co. is to examine and express an opinion on the company's financial statements.

3. D

Neither of the 2 statements is correct.

4. A

All of the above are included in the statutory audit.