Advance Audit and Assuance

Which are the objective of audit sampling ?

• To obtain a sample that is representative of the population
• The number of population items selected when a sample is drawn from a population
• The individual items constituting a population
• To discuss the two approaches in audit sampling approaches before discussing how to obtain a representative sample  

An auditor’s engagement letter most likely will include

• A request for permission to contact the client’s lawyer for assistance in identifying litigation, claims and assessments

• A reminder that management is responsible for illegal acts committed by employees

• The auditor’s preliminary assessment of the risk factors relating to misstatements arising from fraudulent financial reporting

• Management’s acknowledgment of its responsibility for such internal control as it determines is necessary to enable the preparation of financial statements that are free from material misstatement

Which of the following is the best audit procedure for the discovery of damaged merchandise in a client’s ending inventory?

• Compare the physical quantities of slow-moving items with corresponding quantities in the prior year

• Observe merchandise and raw materials during the client’s physical inventory taking

• Review management’s inventory representations letter for accuracy

• Test overall fairness of inventory values by comparing the company’s turnover ratio with the industry average

Roll-forward

work normally occurs between the ____ and the ____.

• Beginning of the year under audit; audit report release date.

• Date of the financial statements; audit report release date.

• Beginning of the year under audit; date of the financial statements.

• Date of interim work; date of the auditors’ report.

To whom should written

representations be addressed?

• Auditors.

• Board of directors.

• Client.

• Stockholders.

If auditors are

appointed on January 3, 2017, the date of the financial statements is

December 31, 2017, the date of the auditors’ report is February 7, 2018

and the audit report release date is March 3, 2018, what is the

appropriate date of the written representations?

• January 3, 2017.

• December 31, 2017.

• February 7, 2018.

• March 3, 2018.

Conflict to interest in the context of audit arises when two audit client belonging to the same firm are competing with each other

• true

• false

Which the following does not give rise to familiarity threat under the ACCA’s Code of Ethics?

• Auditor going on holiday with accountants department of an audit company

• Auditor working together with client in a non - assurance engagement

• Auditor having family relationship with another member of the audit team

• An auditor acting for the same client for more than 5 years

Which the following does not give rise to self- review threat under the ACCA’s Code of Ethics?

• Auditor having a family relationship with the shareholder of the company

• Auditor getting audit fees based in the profit before tax or revenue of the client

• Auditor audit fees from an audit client is 20 percent of its yearly gross practice income

• Auditor having family relationship with the internal auditor of the company

Which the following does not give rise self-review threat under ACCA’s Code of Ethics?

• Auditor prepare the financial statement for the client and then perform the audit using different audit team member.

• Auditor prepare the tax computation for the client and then perform the audit using the same team members

• Auditor acting as both the internal and external auditor

• Auditor attending extraordinary general meeting with the directors