Assurance part3

Which THREE of the following situations would the auditor be able to disclose confidential information about a client?

• Disclosure is required by law

• Disclosure is permitted by law but the auditor has not requested the client's permission.

• The auditor suspects that the client has committed money-laundering offences

• There is a professional duty or right to disclose, when not prohibited by law

Which TWO of the following are NOT the principal reasons why confidentiality is so important to accountants?

• Accountants need their clients to be comfortable to make full disclosure of company affairs to them

• It is a fundamental principle of all the major ethical code

• It means that accountants can work for competitors.

• Failure to keep information confidential reflects badly on the account.

Which TWO of the following would be an appropriate use of confidential information?

• On a change of employment, using experience gained in a previous position.

• Encouraging others to buy shares in a company on the basis of information obtained during the course of the audit

• Providing a prospective auditor with information required by him in order for him to decide whether or not to accept the appointment.

• Using information obtained on the audit of one client to influence the audit opinion given in respect of another client

Which two of the following are reasons why segregation of duties is important in an internal control system?

• It improves efficiency

• It improves the rate of detection of errors.

• It is a way of assigning roles within a large organisation

• It helps to prevent fraud.

The following is example of internal control which operates at Blue plc. Select the type of control activity which is illustrated in the following example: "There are two keys to the locked finance department safe: one held by the finance director and the other by the managing director".

• Authorisation

• Information processing

• Physical control.

• Segregation of duties

Most entities make use of IT systems for financial reporting and operational purposes. Controls operating in an IT environment can be split into general controls and application controls. Which ONE of the following is an application control?

• Use of passwords

• Testing of new systems

• Disaster recovery plan

• Authorisation of data for input.

Which ONE of the following statements is true regarding the audit committee?

• An audit committee must comprise non-executive directors and executive directors

• All companies are required to have an audit committee

• Where there is no internal audit function the audit committee should consider the need for one on an annual basis.

• The role and responsibilities of the audit committee are set out in statute

The following are examples of computer controls which operate in the payroll system at Hana Ltd. Which TWO of the following examples are the types of computer control which illustrate for application control?

• Manual checks to ensure that timesheets are authorised before details are processed.

• Approval of new applications by a sample of users and by magagement

• Range checks on payroll processing.

• Password protection limiting access to data

The following is example of internal control which operates at White plc: "The finance controller reconciles the payables ledger with supplier statements on a monthly basis". Select the type of control activity which is illustrated.

• Performance review

• Information processing.

• Physical control

• Segregation of duties

Which ONE of the following methods of recording an accounting and controls system is a series of questions used to determine whether controls exist which meet specific control objectives?

• Narrative notes

• Questionnaire

• Diagrams

• Flowcharts