AACA 2 ACTIVITY 1 INVESTMENTS

When do we assess Inherent Risk for investments as HIGH? (Multiple answers)

• Correct investment balance presented in the Financial Statements

• Unreliable fair value measurement

• Incorrect classification

• Complete and accurate disclosures

When do we assess Control Risk in investments as HIGH?

• Correct summing of values of investments

• Proper valuation

• Adequate disclosures

• Wrong footing

When the combined risk assessment is high, the detection risk is

• LOW

• HIGH

• MEDIUM

Which of the following procedures are done to test the existence and occurrence assertion? (Multiple answers)

• Inspection

• Confirmation

• Footing

• Vouching

Which of the following audit procedures are done to test the completeness assertion? (Multiple answers)

• Footing

• Confirmation

• Tracing

• Analytical Procedures

In testing the valuation assertion, test for classification of investments for both debt and equity investments are done.

• TRUE

• FALSE

Equity investments with no significant influence are classified as

(a)  

TRUE OR FALSE: Equity investments measured at fair value through profit or loss are only for trading.

(a)  

Gain or loss on sale is recognized in which of the following classification?

• Equity investments measured at fair value through profit or loss

• Equity investments measured at fair value through other comprehensive income

• Equity investments measured at fair value

• No classification recognizes gain or loss on sale

Dividend income from EIFVPL are recognized in Profit or loss while dividend income from EIFVOCI are recognized in Other Comprehensive Income

• TRUE

• FALSE