ACCA AS Audit and Assurance (AA)

Question 1

According to ISA 200, what level of assurance does a statutory audit provide?

Accepted Answer

Reasonable assurance

Answer

Absolute assurance

Answer

Limited assurance

Answer

No assurance

Question 2

Which of the following is a substantive procedure?

Accepted Answer

Confirming a sample of receivable balances directly with customers

Answer

Observing whether segregation of duties exists in the sales department

Answer

Reviewing the bank reconciliation prepared by the client

Answer

Inquiring about changes to the IT control environment

Question 3

Under ISA 530, which sampling method gives every item in the population an equal chance of selection?

Accepted Answer

Random selection

Answer

Haphazard selection

Answer

Block selection

Answer

Judgemental selection

Question 4

An auditor discovers a material misstatement that management refuses to correct. The misstatement is material but not pervasive. What type of audit opinion should be issued?

Accepted Answer

Qualified opinion ('except for')

Answer

Unmodified opinion

Answer

Adverse opinion

Answer

Disclaimer of opinion

Question 5

Which of the following threats to auditor independence is created when the audit firm provides tax advisory services to an audit client?

Accepted Answer

Self-review threat

Answer

Self-interest threat

Answer

Advocacy threat

Answer

Familiarity threat

Question 6

Under ISA 240, which of the following is a characteristic of fraud rather than error?

Accepted Answer

Intentional manipulation of financial statements by those charged with governance

Answer

Unintentional mistakes in gathering or processing data

Answer

Misapplication of accounting policies due to lack of knowledge

Answer

Accidental omission of a disclosure requirement