Assurance Test 1 Chap1-5

Which three of the following constitute possible subject matter which may be evaluated for the purposes of an assurance engagement?

• Data

• Systems or processes

• Corporate governance

• IFRS

Which two of the following describe the roles of the responsible party in any assurance engagement?

• Setting the criteria of the assurance engagement

• Gathering evidence on the subject matter

• Issuing an opinion on the subject matter against the criteria set

• Preparing the subject matter

Which one of the following describes the assurance provided and conclusion given in a reasonable assurance engagement?

• Absolute and negative

• High and negative

• High and positive

• Low and positive

Which three of the following statements form part of the generally accepted definition of 'fair', in the context of 'a true and fair view'?

• The information is free from discrimination and bias

• The accounts have been correctly extracted from the company's books and records.

• The information complies with generally accepted accounting practice.

• The accounts reflect the commercial substance of the company's underlying transactions.

The following is an extract from an independent accountant's unmodified report on a profit forecast: "Based on our examination of the evidence supporting the assumptions, nothing has come to our attention which causes us to believe that these assumptions do not provide a reasonable basis for the forecast." Which one of the following best describes the types of wording and of assurance provided by this statement?

• High level of assurance expressed using a negative form of words

• Limited level of assurance expressed using a negative form of words

• Reasonable assurance expressed using a negative form of words

• Negative assurance expressed using a positive form of words

Which two of the following statements best describe the statutory audit?

• It leads to a certification of the correctness of the financial statements.

• It is an independent examination.

• It is an opinion on the truth and fairness of the financial statements.

• It may be carried out by both external and internal auditors.

Marnie LLP, an audit firm, has been asked by Opportunity Ltd to accept appointment as auditor. Opportunity Ltd's previous auditor was Kim LLP. Which one of the following should be Marnie LLP's course of action if Opportunity Ltd refuses to give them permission to contact Kim LLP?

• Contact Kim LLP in writing in any case and then accept the appointment

• Telephone Kim LLP in order to obtain the information sought and then accept the appointment

• Contact Kim LLP's other clients to try and gain access to Kim LLP, and then accept the appointment

• Make no communication with Kim LLP or their other clients and should normally decline the appointment

Under which three of the following circumstances must a firm decline, or should normally decline, an appointment as auditor to a company?

• The prospective client refuses to grant the firm permission to contact the previous auditor.

• The prospective client refuses to grant permission to the previous auditor to communicate with the firm.

• The prospective client still owes audit fees to the previous auditor.

• The client is one for which your firm is ethically barred from acting.

In order to comply with the Money Laundering Regulations, which one of the following is the number of years for which assurance firms should keep records of the identification of their clients?

• For a minimum of seven years and for seven years after the relationship with the client has ceased

• For a minimum of five years and for five years after the relationship with the client has ceased

• For a minimum of five years and for seven years after the relationship with the client has ceased

• There is no requirement to hold records on client identification for more than one year

Which one of the following is not a right that an auditor has under the Companies Act 2006?

• The right of access to the company's accounting records

• The right to receive all necessary information and explanations

• The right to see all minutes of management and shareholders' meetings

• The right to disclose confidential information in every circumstance without the permission of the client