In the following case, select whether inherent is higher or lower than normal: The company operates in a slow - moving, stable industry

In each of the following case, select whether inherent risk is higher or lower than normal: Financial statements contain balances with straightforward Financial Accounting requirements

In the following case, select whether inherent is higher or lower than normal: The company has recently listed on the local stock exchange with high profit expectations from analysts.

For the following statements, select whether they are true or false in respect of the concept of materiality.

In each of the following case, select whether inherent risk is higher or lower than normal: The business of the company is cash - based

Audit risk can be a split into three components: inherent risk; control risk and detection risk. For each of the following examples, select the types of risk illustrated: The organisation is seeking to raise finance for a new venture

Audit risk can be split into three components: inherent risk, control risk and detection risk. For the following example, select the types of risk illustrated: The organisation operates in a fast - moving, high tech environment

Which two of the following would be used in understanding the entity in accordance with ISA 315?

Which three of the following would increase inherent risk

In the following case, select whether inherent is higher or lower than normal: Inventory is largest balance on the statement of financial position

ABC Ltd's quick ratio has fallen from 1.8:1 to 1.5:1. Which ONE of the following might help to explain this decline?

For each of the following situations select the most appropriate approach which should be used by the assurance firm in the given circumstances: The auditor of a client where controls have been assessed as strong

Which of the following procedures are TESTS OF CONTROL an auditor should perform in testing the inventory cycle of their client whilst attending the inventory count?

Which TWO of the following are assertions used by the auditor about account balances at the period end?

One of the control objectives of the sales system of ABC Co is to ensure that goods and services are sold to credit-worthy customers. Which of the following control activities would assist ABC Co in achieving this objective?

The level of assurance given by an assurance engagement will depend on the type of engagement. For each of the following examples, select the level of assurance you would expect to be given: Statutory audit

Which ONE of the following is NOT a test that could be used by assurance providers to provide evidence relating to a balance in the financial statement?

Which THREE of the following statements are valid?

The draft financial statements of ABC Co show the following information:

Revenue 840

Cost of sales 540

Gross profit 300

Trade receivables 360

Trade payables 260

What is the receivables collection period?

Which THREE of the following are assertions used by the auditor about classes of transactions?

Which of the following controls of a sales system ensure that all goods despatched are completely and accurately invoiced?

Two types of procedures used in gathering evidence are test of controls and substantive procedures. For each of the following examples select the type of procedure illustrated: Calculation of the gross profit margin and comparison with that of the previous accounting period

For each of the following statements select whether they are true of false in respect of substantive procedures. Substantive procedures include both analytical procedures and test of details

ISA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment sets out the five components of internal control. Which of the following is NOT set out as a component of internal control within ISA 315?

For each of the following statements select whether they are true of false in respect of substantive procedures. The auditor must carry out substantive procedures on all material items

Which TWO of the following describe manifestations of the expectations gap

Which TWO of the following are valid comments about the quality of assurance evidence?

Which TWO of the following are assertions used by the auditor about presentation and disclosure?

The following are types of test that might be carried out by an assurance provider. For each example select the financial statement assertion that is being tested: Tracing non- current assets which have been observed in use back to the non- current asset register

Two types of procedures used in gathering evidence are test of controls and substantive procedures. For each of the following examples select the type of procedure illustrated: Observation of opening the post

Which 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?

For each of the following statements select whether they are true of false in respect of substantive procedures. The auditor only carry out substantive procedures if the results of test of controls are inconclusive

Which of the following is not a test of control?

For each of the following situations select the most appropriate approach which should be used by the assurance firm in the given circumstances: The auditor of a client where controls have been assessed as deficient.

An effective internal control system provides the auditor with absolute assurance that control objectives have been achieved

The level of assurance given by an assurance engagement will depend on the type of engagement. For each of the following examples, select the level of assurance you would expect to be given: Report on prospective financial information

Which of the following controls helps to ensure that payroll payments are only made to bona fide employees?

Which of the following is NOT an inherent limitation of internal control systems?

The following are types of test that might be carried out by an assurance provider. For each example select the financial statement assertion that is being tested: Review of the financial statements using a Companies Act checklist

Two types of procedures used in gathering evidence are test of controls and substantive procedures. For each of the following examples select the type of procedure illustrated: Reviewing invoices paid for evidence of authorisation

The level of assurance given by an assurance engagement will depend on the type of engagement. For each of the following examples, select the level of assurance you would expect to be given: Report on review of interim financial information

Which TWO of the following are authorisation control activities?

The following are examples of computer controls which operate in the payroll system at ABC Ltd. For example, select the type of computer control which it illustrates: Password protection limiting access to data

For each of the following statements, select whether they are true or false in respect of the information system in a company. The information system includes the process of preparing the financial statements, such as the production of journals

For each of the following statements select whether they are true or false in respect of business risk: Business risk is of no relevance to the auditor. The auditor is only concerned with audit risk

Which one of the following would be the simplest way of recording a straightforward system not subject to a great deal of change annually?

Which TWO of the following represent inherent limitations of a system of internal control?

The following are examples of internal controls which operate at ABC plc. For each example, select the type of control activity which it illustrates: The financial controller counts petty cash on a monthly basis

For each of the following statements, select whether they are true or false in respect of the information system in a company. The information system companies only the IT system in a company

The following are examples of computer controls which operate in the payroll system at ABC Ltd. For example, select the type of computer control which it illustrates: Manual checks to ensure that timesheets are authorised before details are processed

Which ONE of the following is not part of an entity's risk assessment process?

With regards to internal control systems in small entities, select whether each of the following statements is true or false: Smaller companies are more likely to be successful in the implementation of segregation of duties controls

One of the five elements of internal controls is monitoring of controls. Which TWO of the following are activities which would be used to monitor controls?

The following are examples of internal controls which operate at XYZ plc. For each example, select the type of control activity which it illustrates: The controller reconciles the receivables ledger to the receivables control account monthly

The following are examples of internal controls which operate at ABC Ltd. For example, select the type of control activity which it illustrates: The financial accountant signs the bank reconciliation, which has been prepared by a member of his staff.

Which ONE of the following is NOT a general control?

In each of the following three cases, select whether control risk is higher or lower than normal: Purchase invoices are not authorised prior to payment

In each of the following three cases, select whether control risk is higher or lower than normal: The company has an established and well-resourced internal audit function

An audit committee is a committee with responsibility for audit related matters. Which ONE of the following should be members of an audit committee?

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?

In each of the following three cases, select whether control risk is higher or lower than normal: Entry to the inventory storeroom is only for authorised personnel

The following are examples of internal controls which operate at ABC plc. For example, select the type of control activity which it illustrates: The financial controller reconciles the payables ledger to the payables ledger control account on a monthly basis

Which TWO of the following will reduce password effectiveness as a means of restricting access to a computer system?

For each of the following statements select whether they are true or false in respect of the limitations of a system of internal control: Standard controls may not be designed to deal with unusual transactions

For each of the following statements select whether they are true or false in respect of the limitations of a system of internal control: The effectiveness of many controls rely on the integrity of the personnel involved.

For each of the following statements select whether they are true or false in respect of the limitations of a system of internal control. The effectiveness of many controls rely on the integrity of those applying them

Which Three of the following would be the best sources of information about a company's systems?

ISA 315 states that an internal control system in an organisation consists of five components: the control environment, the entity's risk assessment process, the information system, control activities and monitoring of controls. For each of the following examples, select the component which it illustrates: The process of preparing the financial statements.

ABC plc is large organisation with a complex accounting and information system. Critical to an understanding of the system are the reporting lines and relationships between different departments. In this situation which ONE of the following methods is most likely to be used by the auditor to record the system of document flow?

For each of the following statements select whether they are true or false in respect of the limitations of a system of internal control. Internal controls are only applied to material items

ISA 315 states that an internal control system in an organisation consists of five components: the control environment, the entity's risk assessment process, the information system, control activities and monitoring of controls. For each of the following examples select the component which it illustrates: Review of actual performance against budget

The following are examples of computer controls which operate at PQ plc. For the example, select the type of computer control which it illustrates: Programmes to check data fields on input transactions

For each of the following internal controls, which is the principal limitation? Segregation of duties in a sales system

For each of the following statements select whether they are true or false in respect of business risk: Management are responsible for identifying and controlling business risks

ISA 315 states that an internal control system in an organisation consists of five components: the control environment, the entity's risk assessment process, the information system, control activities and monitoring of controls. For each of the following examples select the component which it illustrates: Review by management of monthly bank reconciliations

For each of the following statements select whether they are true or false in respect of business risk: Business risk is the risk inherent to the company in its operations.

The following are examples of internal controls which operate at ABC plc. For example, select the type of control activity which it illustrates: The payables ledger clerk posts invoices to the payables ledger. The cash book clerk posts cash receipts to the payables ledger

According to ISA 315 which THREE of the following are respects of an entity's control environment?

ISA 315 states that an internal control system in an organisation consists of five components: the control environment, the entity's risk assessment process, the information system, control activities and monitoring of controls. For each of the following examples select the component which it illustrates: Training programme for all staff

An effective system of internal control requires segregation of basic functions. Which THREE of the following functions should ideally be segregated?

The following are examples of internal controls which operate at XYZ plc. For each example, select the type of control activity which it illustrates: The receivables ledger clerk posts invoices to the receivables ledger. The cash book clerk posts cash receipts to the receivables ledger

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?

The following are examples of internal controls which operate at ABC plc. For each example, select the type of control activity which it illustrates: There are two keys to the locked finance department safe: one held by the finance director and the other by the managing director

The following are examples of computer controls which operate in the payroll system at ABC Ltd. For example, select the type of computer control which it illustrates: Range checks on payroll processing

ISA 315 states that an internal control system in an organisation consists of five components: the control environment, the entity's risk assessment process, the information system, control activities and monitoring of controls. For each of the following examples select the component which it illustrates: Locking the inventory storeroom.

In each of the following three cases, select whether control risk is higher or lower than normal: (2) Management often override internal controls

Which regards to internal control systems in small entities, select whether each of the following statements is true or false: Management override is more likely to take place in smaller companies

The following are examples of computer controls which operate at PQ plc. For the example, select the type of computer control which it illustrates: Manual checks to ensure that input data was authorised

In each of the following three cases, select whether control risk is higher or lower than normal: (1) The payables ledgers is not regularly reconciled to the payables ledger control account

For each of the following internal controls, which is the principal limitation? The preparation of a bank reconciliation

Which THREE of the following statements about audit committees are correct?

In each of the following three cases, select whether control risk is higher or lower than normal. The company has a history of reviewing financial performance on a regular basis at board level

The following are examples of internal controls which operate at ABC Ltd. For example, select the type of control activity which it illustrates: The finance director compares monthly expenditure on consumables to budgeted expenditure

The following are examples of computer controls which operate at PQ plc. For the example, select the type of computer control which it illustrates: Storing extra copies of programs and data files off-site

ISA 315 states that an internal control system in an organisation consists of five components: the control environment, the entity's risk assessment process, the information system, control activities and monitoring of controls. For each of the following examples select the component which it illustrates: The entity's organisational structure

For each of the following statements select whether they are true or false in respect of the limitations of a system of internal control. The cost of implementing controls may be more expensive than the cost of any potential risk arising

Which TWO of the following are reasons why organisations need to have effective systems of control? To assist the organisation in