Chapter 3 Evidence and reporting

Question 1

Which three are processess of assurance and reporting?
A Obtaining evidence
B Approach
C Evaluate results of audit work
D Concluding and reporting

Answer 1

ACD

Question 2

Which two does consists in concluding and reporting
A Basic rules
B Audit
C Other

Answer 2

BC

Question 3

Which two are the approaches in obtaining evidence?
A test of controls
B Basic rules
C Substantive procedures

Answer 3

AC

Question 4

Which three is sufficient (quantity)?
A Risk 
B Materiality
C Level of assurance to be given
D Reliable 
E Relevant

Answer 4

ABC

Question 5

Which five are reliable evidence to be appropriate (quality) 
A Auditor generated
B Third party client
C neighbour 
D Directors 
E Manager
F Orginal/written, copy, oral

Answer 5

ABF

Question 6

What is relevant to be appropriate?

Answer 6

Proving one more Fstats assertions

Question 7

Which are the Assertions about classes of transactions and events
A Occurrence - recorded transaction
B Completeness - supposedly recorded transactions
C Accuracy - appropriately recorded amounts
D Cut-off - recorded in correct period for T
E Classification recorded on the proper accounts for T
F Presentation - aggregated of E and T and clearly described
G all of it

Answer 7

G

Question 8

Which are the assertions about account balances and related disclosures at the period end?
A Existence - Assets, liability, equity and interest exist
B Rights and Obligations - The entity own factors of existence
C Completeness - Should have been recorded for factors of existence
D Accuracy, valuation - Factors of existence included in Fstat
E Classification - Factors of Existence recorded in proper accounts
F Presentation - Factors of E aggreagted and clearly descirbed
G Submitted - Factors of E submitted to management for review

Answer 8

ABCDEF

Question 9

True False
1. A sales invoice is not as reliable as a purchase invoice
2. A bank statement from the client’s file is more reliable than a
bank letter sent directly to the auditor
3. An explanation from the client is more reliable when received in
an email than a phone call

Answer 9

1. T
2. F
   3 T

Question 10

Which of the tests control in audit approach is correct? True or False?

1. test the system that deletes the numbers of FStat
2. Procedures, observation and reperformance and data analytics assist Directors in this work
3. Inappropriate if control risk is low and using test control for effecient evidence gathering
4. auditor cannot just carry test of control due to inherent limitations

Answer 10

1. False
   test the system that gets the numbers of FStat
2. false
   Procedures, observation and reperformance and data analytics assist Auditorsin this work
3. false
   Appropriate
4. true

Question 11

Which of the tests control in substantive testing is correct?

1. Test numbers in FStats
2. Process include analysis and tests of detail
3. Carry sometimes substantive process on material items

Answer 11

1. T
2. T
3. Must ‘always’

Question 12

Acorns Ltd is a garden nursery business, selling plants and garden equipment
to the public.
During the year the company purchased two new vans, started construction of
a new greenhouse and sold part of the land around the nursery to a developer.
State which type of testing would be most appropriate for the following
balances:
 Revenue
 Non-current assets

Answer 12

Revenue
 Balance likely to be comprised of large number of transactions.
 Tests of controls most cost effective method.
 Sampling to be used.
 Must have some substantive procedures.
 Analytical procedures to be used in combination.

Non-current assets
 Few transactions in year.
 100% testing of additions and disposals in year.
 Substantive testing.
 Agree to supporting docs.

Question 13

When to use test of control and substantive testing?

1. not expect controls to be effective
2. expect controls to be effective.

Answer 13

ToC = expect

ST = Not expect

Question 14

Which of the following is ‘relevant’, ‘reliable’ and ‘sufficient’ in evaluating results?

1. The Auditor should consider whether any matter come to light casting doubt on evidence. e.g doubt on management and/or discrepancies on evidences
2. if evidence is enough e.g. attempt for further evidence or/and implication for audit opinion
3. audit evidence tu support all FStat to a given account balance

Answer 14

1. Relaible
   2 Sufficient
2. Relevant

Question 15

Which of the express opinions on FStat stated is true and false?

1. True and square
2. Properly prepared in accrodance with Acc standards
3. info from Direcotrs report is inconsistent with Fstat.

Answer 15

1. F: True and fair
2. T
3. F: consistent

Question 16

Which of the following is right for implied opinions on Fstat and when?

1. returns adequate for auditors have been received from branches which are not visited yet
2. Accounts are in agreements with records
3. In-proper accounts have been kept
4. Info for auditor are received
5. Directors remuneration disclosures required by law were not made

Answer 16

1. F
have not been received
2. F
not in agreements
3. F 
Proper accounts are not kept 
4. F
are not received
5. T
When material problem arises and stands for RAPID

Question 17

Whats the order of audit report? 
1. Addressee 
2. Key audit matters
3, Other infromation
4. title. 
5. Managment respobilities 
6. Auditor responsibilities 
7. Opinion on other matters 
8. Auditors opinion on Fstat
9 date of the report
10. Name and signature of engagement partner 
11. matter for auditors to report on 
12. going concern section
13. basis for opinion
14. auditors address

Answer 17

4. 
1.
8.
13.
12.
2.
3. 
5.
6.
7.
11.
10.
14.
9

Question 18

What is the expectation gap between public and auditor reality? T/F?

1. Public - Audit check every balance; Audit - Yes
2. public - Provide 100% assurance; Audit - No
3. public - Guarantee company survival; audit - yes

Answer 18

1. F
audit - No
2. T
3. F 
audit - no