Module 8

Question 1

Who are required to have an audit?

Answer 1

CA 2006 requires audits for most limited companies

Question 2

Small Company audit exemption

Answer 2

meet two out of three

• balance sheet less than 5.1m
• turnover less than 10.2m
• less than 50 employees

Question 3

Companies which always require an audit

Answer 3

public company
banking company
e-money issuer
insurance company
MiDID investment 
corporate body with shares traded on a market in Europe 
public sector entity

Question 4

Charity exemption

Answer 4

England and Wales
exempt if
-income less than 1m or
assets less than 3.26m and income less than 250000

Scotland
income less than 500,000 or

gross assets less than 3.26m or

audit is require by trustees etc

Question 5

Dormant Companies

Answer 5

Most dormant companies are exempt form audit

Question 6

How does a shareholder audit veto work

Answer 6

members, individually or in aggregate, who hold more than 10% can veto audit exemption up to one month before the end of the financial year

Question 7

What are the key responsibilities of an auditor

Answer 7

express an option on whether statements give a true and fair view and whether financial statements are consistent with strategic report and directors report.

Opinion is expresses to shareholders.

Question 8

What is the expectations gap

Answer 8

difference between what the public thinks auditor responsibilities are and the actual responsibilities

Question 9

How is the expectations gap managed?

Answer 9

including auditors responsibilities in the FS

Audit report detailing the scope of the audit

Question 10

What personal qualities should an auditor have

Answer 10

Credibility,

integrity, ethics and independence

Question 11

What are the Recognised Qualifying Bodies

Answer 11

ICAS
ACCA
AIA
ICAEW
CAI

Question 12

What are the Recognised Supervisory Bodies

Answer 12

ICAS
ICAEW
ACCA
CAI

Question 13

How to obtain a practising certificate

Answer 13

completed two years post qualifying experience
comply with institute they are applying to
have professional indemnity insurance

Question 14

Applying for individual statutory auditor status

Answer 14

apply to the authorisation committee of their RSB

• hold audit qualification
• fit and proper person
• practising certificate
• member of registered audit firm
• profess indemnity insurance

Question 15

Applying for firm statutory auditor status

Answer 15

each principals must be members of RSBs
majority of principals have qualification 
firm has audit compliance principal
firm Is fit and proper
indemnity insurance