FCCA FCCA Audit and Assurance

Question 1

Which body sets international auditing standards used by ACCA and FCCA members in most jurisdictions outside the US?

Accepted Answer

IAASB (International Auditing and Assurance Standards Board)

Answer

FASB

Answer

SEC

Answer

AICPA

Question 2

What is the primary objective of an external audit of financial statements?

Accepted Answer

To express an opinion on whether the financial statements give a true and fair view

Answer

To guarantee the accuracy of all figures in the financial statements

Answer

To detect and prevent all fraud within the organization

Answer

To provide investment advice based on the financial results

Question 3

Under ISA 315, an auditor must obtain an understanding of which key areas to identify risks of material misstatement?

Accepted Answer

The entity and its environment, including internal controls

Answer

Industry benchmarks and competitor performance

Answer

The auditor's own internal quality control procedures

Answer

Prior year audit findings from other audit firms

Question 4

Which type of audit opinion is issued when the financial statements give a true and fair view with no material misstatements?

Accepted Answer

Unmodified (unqualified) opinion

Answer

Qualified opinion

Answer

Adverse opinion

Answer

Disclaimer of opinion

Question 5

Audit risk is composed of three components. Which of the following is NOT one of them?

Accepted Answer

Compliance risk

Answer

Inherent risk

Answer

Control risk

Answer

Detection risk

Question 6

Under ISA 530, audit sampling involves selecting less than 100% of items in a population. What is the main purpose of this technique?

Accepted Answer

To obtain sufficient appropriate audit evidence about a population by testing a representative sample

Answer

To reduce the audit fee by doing less work

Answer

To identify only high-value transactions for testing

Answer

To comply with SEC requirements for listed companies