BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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He should acquire knowledge of client’s business
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He should not have access to books of accounts of banks
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He should do routine checking of all transactions
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He cannot be a Limited Liability Partnership firm
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Detailed explanation-1: -The auditor should obtain an understanding of the company and its environment ("understanding of the company") to understand the events, conditions, and company activities that might reasonably be expected to have a significant effect on the risks of material misstatement.
Detailed explanation-2: -EVALUATION OF PROSPECTIVE AUDITING CLIENTS Client acceptance evaluation should include General Considerations, Management Integrity, Management Commitment to GAAP, Management Internal Control Consciousness, Financial Strength of the Client, and Other Risk Factors.
Detailed explanation-3: -When auditing historical financial statements, an auditor must have a thorough understanding of the client and its environment. This knowledge should include the client’s regulatory and operating environment, business strategies and processes, and measurement of indicators.
Detailed explanation-4: -A bank auditor is an accounting specialist who evaluates the accuracy, completeness and legitimacy of a bank’s financial records. They ensure banks comply with their own procedures and with state and federal finance laws.