AA - Ch-6

Indicate which TWO of the following statements describe the objectives of planning the audit.

• To ensure appropriate attention is devoted to important areas of the audit

• To assist in the co-ordination of work done by any auditor's experts

• To ensure that the audit engagement is only accepted if this is permissible by the ACCA Code of ethics and conduct

• To ensure the audit is completed within budget restraints

The auditor of P Co is planning the audit work on trade receivables.

Which of the following procedures could not be performed by using computer-assisted audit techniques?

• Selection of a sample of receivables for confirmation

• Calculation of receivables collection period

• Production of receivables' confirmation letters

• Evaluation of the adequacy of the allowance for receivables

Which of the following matters would the overall audit strategy include?

• The applicable financial reporting framework

• The nature, timing and extent of audit procedures at the assertion level

• The timetable of planned audit work

• The level for performance materiality

When gaining an understanding of the specific business operations of an audit client which of the following matters would an auditor need to consider?

• Accounting principles and industry specific practices relevant to the client's business

• Acquisitions or disposals of the client's business activities

• Leasing of property, plant or equipment for use in the client's business

• Products or services and markets of the client's business

Misstatements can arise from error or fraud.

Which of the following statements is correct regarding the auditor's accumulation of identified

misstatements?

• The auditor must accumulate all misstatements identified during the audit.

• The auditor must only accumulate individually material misstatements identified during the audit.

• The auditor must accumulate misstatements identified during the audit, other than those that are clearly trivial.

• The auditor must accumulate all misstatements identified during the audit so that they can form part of the audit planning for the following year.

Which TWO of the following statements BEST describe the purpose of using analytical procedures during the planning stage of Flute Co' s audit?

• To help form an overall conclusion on the financial statements

• To obtain relevant and reliable audit evidence

• To assist with identification of risks of material misstatement

• To assist in identifying unusual transactions and events at Flute Co