Module 11

Question 1

Companies Act 2006 provides auditors with

Answer 1

Rights and duties to allow them to carry out effective audits

Question 2

European Commission harmonises CA legislation through (2)

Answer 2

• Issuing directives

- Making regulations

Question 3

CA 2006 section 407

Answer 3

All members of a group must adopt the same financial reporting framework

Question 4

FRC carries out

Answer 4

Thematic reviews - focus on issues raised in inspection findings in greater depth

Question 5

Transparency reports findings (4)

Answer 5

• Lack of awareness they exist
• Firms using them as a marketing tool
• Some issues of non-compliance
• Use of diagrams and infographics good

Question 6

Mission of International Federation of Accountants (IFAC) (4)

Answer 6

• Development of high quality international standards
• Adoption and implementation of standards
• Building capacity of professional accountancy organisations
• Speaking out on public interest issues

Question 7

Auditor must be registered with

Answer 7

One of the recognised supervisory bodies

Question 8

CMA audit (2019) recommendations (4)

Answer 8

• Audit committee scrutiny
• Mandatory joint audit
• Operational split between audit and non audit practices of big four
• Five year review of progress by new regulator

Question 9

Brydon report (2019) recommendations (6)

Answer 9

• Redefinition of audit and its’ purpose
• Encourage greater engagement of shareholders
• Change in opinion language
• Greater clarity on role of AC
• Improved auditor communication and transparency
• Increased use of technology

Question 10

FRC Ethical standard changes (4)

Answer 10

• Prohibiting auditors from providing recruitment and remuneration services / helping with management decision making
• Only certain NAS of PIEs allowed by auditors
• Removing concessions for listed small and medium sized entities
• Amendments to requirements regarding long association of audit firms

Question 11

Practice notes published by FRC

Answer 11

Intended to assist auditors in applying best practise auditing standards to particular circumstances and industries

Question 12

FRC bulletins

Answer 12

Issued to provide auditors with guidance on new or emerging issues

Question 13

FRC Ethical standard applied to

Answer 13

All audit and other public interest assurance engagements