Assurance & Audit Flashcards
6 cards from real ACA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Assurance & Audit flashcards as text
The concept of 'true and fair view' in UK auditing means the financial statements:
Answer: Give a fair presentation of the financial position and performance
True and fair view means the financial statements faithfully represent the financial position and performance without material misstatements, giving users a reliable picture of the entity.
Under ISA 500, the reliability of audit evidence is generally higher when:
Answer: Evidence is obtained from external, independent sources
ISA 500 indicates evidence is more reliable when obtained from independent external sources, compared to internally generated evidence or representations from management.
An auditor issues an adverse opinion when:
Answer: The financial statements contain pervasive material misstatements
An adverse opinion is issued when misstatements are both material and pervasive, meaning they fundamentally affect the financial statements and would mislead users.
Under ISA 620, an auditor may use an expert's work. The responsibility for the audit opinion:
Answer: Remains with the auditor
ISA 620 is clear that even when using an auditor's expert, the auditor retains sole responsibility for the audit opinion and must evaluate the adequacy of the expert's work.
Which of the following is a control risk indicator?
Answer: Management override of internal controls
Control risk is the risk that internal controls fail to prevent or detect a material misstatement; management override of controls is a significant indicator of high control risk.
Under ISAE 3000, a review engagement differs from an audit because:
Answer: It uses only enquiry and analytical procedures
A review under ISAE 3000 primarily uses enquiry and analytical procedures rather than the full range of audit procedures, resulting in limited rather than reasonable assurance.