ADVANCED AUDIT AND ASSURANCE – Page 5

AAA – L3 – SA – Q2.3 – Audit Committee Functions

Function of audit committee per 2020 Code.

Question

According to the Code of Corporate Governance for Listed Companies 2020, which ONE of the following is a function of the audit committee:

A To make recommendations to the Board with respect to the effectiveness of internal controls

B To review the risks facing the company

C To make recommendations on induction and training to the Board

D To recommend a remuneration policy for directors to the Board.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit committee, Corporate Governance, ICAG, Internal controls
Level: Level 3

Topic: The regulatory environment

AAA – L3 – SA – Q2.2 – Confidential Information Disclosure

Permissible disclosure of client confidential information.

Question

In which of the following circumstances would it be permissible for an auditor to disclose confidential information about a client?

A To assist the firm with the audit of another client in the same industry

B To inform shareholders when disclosure is in the public interest

C To protect the interests of the shareholders

D To defend the firm against an official accusation of professional negligence.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Confidentiality, Disclosure, ICAG, Professional Ethics
Level: Level 3

Topic: Rules of Professional Conduct

AAA – L3 – SA – Q2.1 – Agency Theory

Directors as agents in agency theory.

Question

In the context of agency theory, the directors of a company are the agents of:

A The auditors

B The audit committee

C The institutional shareholders

D All shareholders

Answer

Find Related Questions by Tags, levels, etc.

Tags: Agency Theory, Corporate Governance, Directors, ICAG, Shareholders
Level: Level 3

Topic: The regulatory environment

AAA – L3 – SA – Q1.10 – Audit Opinion

Audit opinion for disclosed zero-interest loan.

Question

If a client has a loan from another group company at zero rate of interest and discloses it in a note to the financial statements, what is the correct audit opinion?

A It depends whether the item is material

B Qualified opinion, ‘except for’

C Qualified opinion, ‘adverse’

D Unqualified

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit opinion, Financial Statement Disclosure, Going Concern, ICAG
Level: Level 3

Topic: Reporting

AAA – L3 – SA – Q1.9 – Negative Assurance

Definition of negative assurance.

Question

What is meant by negative assurance?

A The auditor cannot give an opinion due to lack of evidence.

B The client’s financial statements were found to be materially misstated.

C The auditor could not conduct any tests due to lack of controls.

D The auditor did not find anything to indicate that a material misstatement exists.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Assurance engagements, Audit opinion, ICAG, Negative Assurance
Level: Level 3

Topic: Assurance Services

AAA – L3 – SA – Q1.8 – Going Concern Audit

Incorrect statement about going concern audit.

Question

Which of the following is NOT true about audit of the appropriateness of management’s use of the going concern basis of accounting?

A The auditor must assess the appropriateness of the going concern basis of accounting.

B Auditing the cash flow forecast is a good source of audit evidence.

C Written representations are usually sufficient on their own.

D If there a material uncertainty exists with regards to going concern, an unmodified audit opinion is possible if a Material Uncertainty Related to Going Concern paragraph is included.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Evidence, Audit opinion, Going Concern, ICAG
Level: Level 3

Topic: Evaluation and review

AAA – L3 – SA – Q1.7 – Impairment

Incorrect statement about impairment.

Question

Which of the following statements is INCORRECT?

A Goodwill must be reviewed annually for impairment

B There is impairment when the recoverable amount is above the carrying amount

C The recoverable amount is the higher of fair value less costs to sell and value in use

D Value in use essentially involves discounted cash flow forecasts

Answer

Find Related Questions by Tags, levels, etc.

Tags: Goodwill, ICAG, Impairment, Recoverable Amount
Level: Level 3

Topic: Evaluation and review

AAA – L3 – SA – Q1.6 – Business Risks

Identifying external business risk.

Question

The following are all business risks. Which is the odd one out?

A High financial gearing

B The rate of inflation

C Overtrading

D A dominant chief executive

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Risks, External Risk, ICAG, Internal Risk
Level: Level 3

Topic: The audit approach

AAA – L3 – SA – Q1.5 – Business Risk Approach

Disadvantage of business risk audit approach.

Question

One of the disadvantages with a business risk approach to the audit is:

A A perceived conflict with auditor independence

B Increase in knowledge of the client’s business

C A reduced focus on processing errors

D More senior staff are involved

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Strategy, Auditor Independence, Business Risk Approach, ICAG
Level: Level 3

Topic: The audit approach

AAA – L3 – SA – Q1.4 – Engagement Letter

Contents of a statutory audit engagement letter.

Question

Matters covered in an engagement letter for a statutory audit will normally include:

1 Use of internal audit

2 Use of experts

3 Number of audit personnel who will be involved in the audit

4 Basis of fees

A 1, 2 and 3 only

B 1, 3 and 4 only

C 2, 3 and 4 only

D 1, 2 and 4 only

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Procedures, Engagement Letter, ICAG, Statutory Audit
Level: Level 3

Topic: Practice management

Subject (SQ): ADVANCED AUDIT AND ASSURANCE

Search

Filter by Professional Bodies

Filter by Subject

Filter by Topics

Filter by Levels

AAA – L3 – SA – Q2.3 – Audit Committee Functions

Function of audit committee per 2020 Code.

AAA – L3 – SA – Q2.2 – Confidential Information Disclosure

Permissible disclosure of client confidential information.

AAA – L3 – SA – Q2.1 – Agency Theory

Directors as agents in agency theory.

AAA – L3 – SA – Q1.10 – Audit Opinion

Audit opinion for disclosed zero-interest loan.

AAA – L3 – SA – Q1.9 – Negative Assurance

Definition of negative assurance.

AAA – L3 – SA – Q1.8 – Going Concern Audit

Incorrect statement about going concern audit.

AAA – L3 – SA – Q1.7 – Impairment

Incorrect statement about impairment.

AAA – L3 – SA – Q1.6 – Business Risks

Identifying external business risk.

AAA – L3 – SA – Q1.5 – Business Risk Approach

Disadvantage of business risk audit approach.

AAA – L3 – SA – Q1.4 – Engagement Letter

Contents of a statutory audit engagement letter.

Our Offerings

Contact Info

My Account

Get In Touch

Subject (SQ): ADVANCED AUDIT AND ASSURANCE

Search

Filter by Professional Bodies

Filter by Subject

Filter by Topics

Filter by Levels

Function of audit committee per 2020 Code.

You're reporting an error for "AAA – L3 – SA – Q2.3 – Audit Committee Functions"

Permissible disclosure of client confidential information.

You're reporting an error for "AAA – L3 – SA – Q2.2 – Confidential Information Disclosure"

Directors as agents in agency theory.

You're reporting an error for "AAA – L3 – SA – Q2.1 – Agency Theory"

Audit opinion for disclosed zero-interest loan.

You're reporting an error for "AAA – L3 – SA – Q1.10 – Audit Opinion"

Definition of negative assurance.

You're reporting an error for "AAA – L3 – SA – Q1.9 – Negative Assurance"

Incorrect statement about going concern audit.

You're reporting an error for "AAA – L3 – SA – Q1.8 – Going Concern Audit"

Incorrect statement about impairment.

You're reporting an error for "AAA – L3 – SA – Q1.7 – Impairment"

Identifying external business risk.

You're reporting an error for "AAA – L3 – SA – Q1.6 – Business Risks"

Disadvantage of business risk audit approach.

You're reporting an error for "AAA – L3 – SA – Q1.5 – Business Risk Approach"

Contents of a statutory audit engagement letter.

You're reporting an error for "AAA – L3 – SA – Q1.4 – Engagement Letter"

admin

Pick a Form