Level 2 – Page 5

AA – L2 – SA – Q1.10 – IAS 37 Components

Identify what does not appear in IAS 37.

Question

Which of the following does not appear in IAS 37?

A Deferred revenue

B Contingent assets

C Provisions

D Contingent liabilities

Answer

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Tags: Audit Evidence, Contingent Liabilities, IAS 37, ICAG, Provisions
Level: Level 2

Topic: Audit and Assurance Evidence

AA – L2 – SA – Q1.9 – Cut-Off

Identify what is not true about cut-off.

Question

What is NOT true about cut-off?

A Last goods received note will determine the last invoice appearing in receivables

B It determines where one period ends and another one starts

C Details should be taken at the inventory count

D It is a good way to manipulate the financial statements

Answer

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Tags: Cut-off, Financial Statements, ICAG, Inventory Count
Level: Level 2

Topic: Audit and Assurance Evidence

AA – L2 – SA – Q1.8 – Test of Control

Identify which is not a test of control.

Question

Which of the following is NOT a test of control? A Checking that all purchase invoices are authorized by the proper people B Test checking from purchase invoices to goods received notes C Where a list of approved suppliers exists, checking that orders are placed only with suppliers on such a list D Checking for sequential numbering by the client of purchase invoices received

Answer

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Tags: Audit Evidence, ICAG, Purchase Invoices, Test of Control
Level: Level 2

Topic: Audit and Assurance Evidence

AA – L2 – SA – Q1.7 – IT Controls Categorization

Categorize IT controls as information processing or general IT.

Question

Information technology controls are classified as information processing controls or general IT controls. For each of the below controls select the correct categorization.

One-for-one checking of processed output to source documents
A Information processing
B General IT
Using password protection in computer systems
C Information processing
D General IT

Answer

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Tags: Audit Evidence, General IT, ICAG, Information Processing, IT Controls
Level: Level 2

Topic: Audit and Assurance Evidence

AA – L2 – SA – Q1.6 – Current File Content

Identify what is not expected in a current file.

Question

Which of the following would you NOT expect to see in a current file?

A Bank reconciliation

B Inventory count details

C Engagement letter

D Replies from customers relating to a circularization

Answer

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Tags: Audit Evidence, Current File, Engagement Letter, ICAG
Level: Level 2

Topic: Audit and Assurance Evidence

AA – L2 – SA – Q1.5 – Audit Planning

Identify what is not considered at the audit planning stage.

Question

At the planning stage you would NOT consider:

A the timing of the audit

B whether corrections from the inventory count have been implemented

C last year’s audit

D the potential use of internal audit

Answer

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Tags: Audit Planning, ICAG, Internal Audit, Inventory Count
Level: Level 2

Topic: Planning and Approach for Audit and Assurance Engagements

AA – L2 – SA – Q1.4 – Internal Audit Functions

Identify two effective internal audit functions.

Question

The objectives and scope of the internal audit function vary widely and depend on the structure and size of the entity plus the requirements of management. Which TWO of the following functions could internal audit perform and still operate effectively? A Examining financial and operational information for management B Reviewing accounting systems and related controls C Approving annual budgets D Preparing reconciliations between the receivables ledger control account and the receivables ledger

Answer

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Tags: Audit functions, Controls, ICAG, Internal Audit, Management
Level: Level 2

Topic: Internal Audit and Its Relationship with External Audit

AA – L2 – SA – Q1.3 – Professional Ethics Guidance

True/false on ICAG ethical guidance and rules-based codes.

Question

For each of the following statements, in relation to guidance on professional ethics, select whether they are true or false.

Ethical guidance from ICAG is in the form of rules rather than principles
A True
B False
Rules-based codes offer a more straightforward ethical framework as they cover specific situations
C True
D False
A rules-based ethical framework can more effectively accommodate a fast-changing environment
E True
F False

Answer

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Tags: Ethical Framework, ICAG, Principles-Based, Professional Ethics, Rules-Based
Level: Level 2

Topic: Professional and Ethical Issues in Financial Reporting

AA – L2 – SA – Q1.2 – Auditor Rights

Identify which is not a right of an auditor.

Question

Which of the following is NOT the right of an auditor?

A The right of access to accounting records and financial statements

B The right to requisition a general meeting on material audit matters

C The right to receive necessary information and explanations

D The right to receive advance notice of any general meeting

Answer

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Tags: Audit Responsibilities, Auditor Rights, Companies Act, ICAG
Level: Level 2

Topic: Regulatory Framework and Audit Responsibilities

AA – L2 – SA – Q1.1 – True and Fair View

Meaning of 'true and fair view' in financial statements.

Question

Although the phrase ‘true and fair view’ has no legal definition, which of the following most accurately describes its meaning with regard to the financial statements of a company?

A The financial statements have been properly prepared in accordance with the law

B The financial statements are free from material misstatements, and they are presented in an understandable and unbiased way

C All items in the financial statements are factually accurate

D The financial statements have been audited

Answer

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Tags: Assurance, Auditing, Financial Statements, ICAG, True and Fair View
Level: Level 2

Topic: Introduction to Audit and Assurance Engagements

Level (SQ): Level 2

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AA – L2 – SA – Q1.10 – IAS 37 Components

Identify what does not appear in IAS 37.

AA – L2 – SA – Q1.9 – Cut-Off

Identify what is not true about cut-off.

AA – L2 – SA – Q1.8 – Test of Control

Identify which is not a test of control.

AA – L2 – SA – Q1.7 – IT Controls Categorization

Categorize IT controls as information processing or general IT.

AA – L2 – SA – Q1.6 – Current File Content

Identify what is not expected in a current file.

AA – L2 – SA – Q1.5 – Audit Planning

Identify what is not considered at the audit planning stage.

AA – L2 – SA – Q1.4 – Internal Audit Functions

Identify two effective internal audit functions.

AA – L2 – SA – Q1.3 – Professional Ethics Guidance

True/false on ICAG ethical guidance and rules-based codes.

AA – L2 – SA – Q1.2 – Auditor Rights

Identify which is not a right of an auditor.

AA – L2 – SA – Q1.1 – True and Fair View

Meaning of 'true and fair view' in financial statements.

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Identify what does not appear in IAS 37.

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