BÀI 1

CÂU 1:
The following is an extract from an independent accountant's unmodified report
on a profit forecast: "Base on our examination of the evidence supporting the
assumptions, nothing has come to our attention which causes us to believe that
these assumptions do not provide a reasonable basis for the forecast".
Which ONE of the following BEST describes the type of assurance provided by
this statement?
A.Positive assurance expressed negatively
B.Negative assurance expressed positively
C.High level of assurance expressed negatively
D.Limited level of assurance expressed negatively
CÂU 2:
Which one of the following best describes the concept of assurance?
A.An assurance firm's high level of satisfaction as to the reliability of an
assertion being made by one party for the use of another party
B.An assurance firm's satisfaction as to the reliability of an assertion being
made by one party for the use of another party
C.A user's satisfaction as to the reliability of an assertion being made by another
party
D.An assurance firm's limited level of satisfaction as to the reliability of an
assertion being made by one party for the use of another party
CÂU 3:
Which three of the following describe aspects of the expectations gap with
respect to the external audit
A.Users do not understand the meaning of the audit opinion
B.Users do not aware of the limitations of the audit process
C.Users do not appreciate that reasonable assurance is a low level of assurance
D.Users do not understand what the audit process involves
CÂU 4:
The statement: "Relevant criteria for assurance engagements relating to FSs are
likely to be accounting standards" is true or false?
A.True
B.False
CÂU 5:
Which ONE of the following statements best describes the evidence obtained
and the opinion given in a reasonable assurance engagement?
A.Sufficient appropriate evidence and a negative opinion
B.Sufficient appropriate evidence and a positive opinion
C.A lower level of evidence and a negative opinion
D.A lower level of evidence and a positive opinion
CÂU 6:
Which three of the following are key elements of a general assurance
engagement?
A.A user
B.A subject matter
C.Suitable criteria
D.An assurance file
CÂU 7:
There are two types of assurance engagement: reasonable assurance
engagements and limited assurance engagements. There are two types of
assurance conclusions: Positive and Negative. For reasonable assurance
engagement, select the appropriate conclusion given?
A.Positive
B.Negative
CÂU 8:
The statement: "Suitable criteria can only be identified for assurance
engagements relating to financial statements" is true or false?
A.True
B.False
CÂU 9:
In any assurance engagement there are three parties involved: the responsible
party, the practitioner and user.
In respect of given subject matter, which party provides an opinion on whether
the subject matter complies with the criteria?
A.User
B.Practitioner
C.Responsible party
CÂU 10:
There are two types of assurance engagement: reasonable assurance
engagements and limited assurance engagements. There are two types of
assurance conclusions: Positive and Negative. For limited assurance
engagement, select the appropriate conclusion given?
A.Positive
B.Negative
CÂU 11:
The statement: "The criteria for all assurance engagements will be the same" is
true or false?
A.True
B.False
CÂU 12:
Which two of the following are limitations of the provision of assurance?
A.Assurance work is carried out by people independent of the entity
B.Sampling is used in assurance work
C.Client system have inherent limitations
D.Unqualified staff may be used on assurance engagements
CÂU 13:
You are an audit manager of an audit firm and have just been assigned the audit
of ABC company. In an initial meeting with the finance director of ABC, you
learn that the audit team will not be entertained on ABC's yacht this year,
instead, he has arranged a balloon flight costing less than one-tenth of the
expense of using the yacht and hopes this will be acceptable.
Which of the following actions should be taken to ensure the firm complies with
Code of Ethics and Conduct?
A.The gift may be accepted as Stark has taken appropriate measures to reduce
the value of the gift compared to previous years.
B.The value of the gift should be assessed to determine whether it is of material
value to the financial statements.
C.The gift should only be accepted if its value is trivial and inconsequential to
the recipients.
D.Only the audit partner and audit manager should accept the gift.
CÂU 14:
The level of assurance given by an assurance engagement will depend on the
type of engagement. For Review of financial information, select what level of
assurance you would expect to be given:
A.Reasonable
B.Limited
CÂU 15:
In any assurance engagement there are three parties involved: The responsible
party, the practitioner and the user. In respect of given subject matter state which
party gathers evidence on the subject matter?
A.Responsible party
B.Practitioner
C.User
CÂU 16:
Which of the following could cause advocacy
A.Audit team to be offered a balloon flight entertainment
B.Tax fee to be based on a percentage of tax saved
C.Firm to represent client in a dispute with the tax authorities
CÂU 17:
For each of the following statements select whether they are true or false.
Reasonable assurance is absolute assurance of the correctness of the subject
matter
A.True
B.False
CÂU 18:
You are the audit manager of an audit firm and you are planning the audit of
ABC Co, a listed company, which has been an audit client for five years and
specialises in manufacturing luxury laptop. The employees of ABC Co are
entitled to purchase laptop at a discount of 20%. The audit team has in previous
years been offered the same level of staff discount.
Which of the following options best identifies the valid potential threats to
independence in the audit of ABC Co and allocates the threat to the most
appropriate category?
A.Familiarity
B.self-interest
C.Self-review
D.intimidation
CÂU 19:
You are the audit manager of an audit firm and you are planning the audit of
ABC Co, a listed company, which has been an audit client for five years and
specialises in manufacturing luxury laptop. The employees of ABC Co are
entitled to purchase laptop at a discount of 20%. The audit team has in previous
years been offered the same level of staff discount.
Which of the following statements is true in accordance with Code of Ethics and
Conduct?
A.The audit team can accept the discount as it is on the same terms as that
offered to staff
B.Junior members of the audit team are allowed to accept the discount, but the
audit manager and audit partner should not
C.Unless the value of the discount is trivial and inconsequential to the audit
team members, the offer should be declined
D.The audit team is only allowed to accept a discount of up to 5%
CÂU 20:
The level of assurance given by an assurance engagement will depend on the
type of engagement. For statutory audit, select what level of assurance you
would expect to be given:
A.Absolute
B.Reasonable
CÂU 21:
Which of the following is the most appropriate definition of the external audit?
A.The external audit is an exercise carried out by auditors in order to give an
opinion on whether the financial statements of a company are materially
misstated.
B.The external audit is an exercise carried out in order to give an opinion on the
effectiveness of a company's internal control system.
C.The external audit is performed by management to identify areas of
deficiency within a company and to make recommendations to mitigate those
deficiencies.
D.The external audit provides negative assurance on the truth and fairness of a
company's financial statements
CÂU 22:
ABC audit firm audits XYZ Co. In accordance with Code of Ethics and
Conduct which two of the following circumstances would constitute a threat to
objectivity?
(1) An employee of ABC owns shares in XYZ Co but is not part of the audit
team
(2) The best friend of the engagement partner owns a significant indirect
financial interest in XYZ Co
(3) The audit manager of an audit owns a small number of shares in XYZ Co
(4) The husband of the audit partner owns shares in XYZ Co
A.(1) and (2)
B.(1) and (4)
C.(2) and (3)
D.(3) and (4)
CÂU 23:
The level of assurance given by an assurance engagement will depend on the
type of engagement. For Report on profit and cash flow forecasts, select what
level of assurance you would expect to be given:
A.Reasonable
B.Limited
CÂU 24:
Who normally appoints the external auditors of a company?
A.Directors
B.Shareholders
C.Audit committee
D.Senior management
CÂU 25:
In any assurance engagement there are three parties involved: the responsible
party, the practitioner and user.
In respect of given subject matter state which party determines the suitable
criteria?
A.User
B.Practitioner
C.Responsible party
CÂU 26:
In which of the following situations would the auditor be able to disclose
confidential information about a client?
(1) Disclosure is required by law.
(2) Disclosure is permitted by law but the auditor has not requested the client's
permission.
(3) The auditor suspects that the client has committed money-laundering
offences.
A.(1) and (2) only
B.(1) and (3) only
C.(2) and (3) only
D.(1), (2) and (3)
CÂU 27:
For each of the following statements select whether they are true or false.
A statutory audit gives reasonable assurance that the FSs give a true and fair
view?
A.True
B.False
CÂU 28:
For each of the following statements select whether they are true or false.
A negative assurance conclusion gives a limited level of assurance
A.True
B.False
CÂU 29:
In any assurance engagement there are three parties involved: The responsible
party, the practitioner and the user. In respect of given subject matter state which
party prepares the subject matter
A.responsible party
B.practitioner
C.User
CÂU 30:
Which two of the following are fundamental principles as stated in the Code of
Ethics and Conduct?
(1) Objectivity
(2) Independence
(3) Confidentiality
(4) Professional scepticism
A.(1) and (4)
B.(1) and (2)
C.(2) and (3)
D.(1) and (3)
CÂU 31:
Which one of the following is NOT a benefit of an assurance report on
Financial information? An assurance report
A.Enhances the credibility of the information being reported upon
B.Reduces the risk of management bias in the information being reported upon
C.Attests to the correctness of the information being reported upon
D.Draws the attention of the user to deficiencies in the information being
reported upon
 BÀI 2:
CÂU 1:
Which THREE of the following are purposes of a letter of engagement?
A.Setting out the form of any report to be issued
B.Providing constructive suggestions to management concerning improvements
in internal control
C.Documenting and confirming acceptance of the appoitment
D.Narrowing the expectations gap
E.Providing evidence on matters where other evidence is not expected to exist
CÂU 2:
Which ONE of the following is NOT a benefit of an engagement letter in
respect of assurance services?
A.Clearly defines the extent of the assurance provider's responsibilities
B.Provides written confirmation of the acceptance of the engagement
C.Confirms the scope of the engagement
D.Certifies the assurance provider's opinion
CÂU 3:
C&C company, an assurance firm, has the following two clients among its client
portfolio. For each client, seclect whether inherent risk is high or low.
Hana Ltd is currently facing financial difficulties and is seeking alternative
forms of finance.
A.High risk
B.Low risk
CÂU 4:
Which TWO of the following are auditors always required to do on being
invited to accept an audit engagement?
A.Ensure they are professionally existing resources to carry out the audit
B.Ensure they have adequate existing resources to carry out the audit
C.Obtain references for key personnel within the entity to be audited
D.Communicate with the existing auditors to discover any reasons they should
not accept appointment
CÂU 5:
For each of the following statements seclect whether they are true or false in
respect of the audit engagement letter: The engagement letter should be sent
after commencement of the audit but before the signing of the auditor's report
A.True
B.False
CÂU 6:
When gaining an understanding of the specific business operations of an audit
client which of the following matters would an auditor need to consider?
A.Accounting principles and industry specific practices relevant to the client's
business
B.Acquisitions or disposals of the client's business activities
C.Leasing of property, plant or equipment for use in the client's business
D.Products or services and markets of the client's business
CÂU 7:
'Audit risk' represents the risk that the auditor will give an inappropriate opinion
on the financial statements when the financial statements are materially
misstated. Which of the following categories of risk can be controlled by the
auditor? Category of risk:
(1) Control risk
(2) Detection risk
(3) Sampling risk
A.(1) and (2)
B.(2) only
C.(1) and (3)
D.(2) and (3)
CÂU 8:
For each of the following statements select whether they are true or false in
respect of the audit engagement letter: The engagement letter should be sent
before acceptance of appointment
A.True
B.False
CÂU 9:
Who is responsible for the prevention and detection of fraud?
A.Internal auditors
B.External auditors
C.Those charged with governance and management
D.The audit committee
CÂU 10:
For each of the following statements seclect whether they are True or false in
respect of the audit engagement letter: An engagement letter should be sent to
all new clients
True
CÂU 11:
What are the two elements of the risk of material misstatement at the assertion
level?
A.Inherent risk and detection risk
B.Audit risk and detection risk
C.Inherent risk and control risk
D.Detection risk and control risk
CÂU 12:
For each of the following factors at a prospective client select whether that
factor indicates that client is high risk or low risk: Company has prudent
accounting policies
A.High risk
B.Low risk
CÂU 13:
C&C company, an assurance firm, has the following two clients among its client
portfolio. For each client, seclect whether inherent risk is high or low.
Tulip Ltd is planning to list on the local stock exchange within the next two
years.
A.High risk
B.Low risk
CÂU 14:
Which of the following best describes professional scepticims. The assurance
provider shoud:
A.Not believe anything that management tells him
B.Not believe anything that management tells him, without obtaining supporting
evidence
C.Apply a questioning mind to the information and evidence he obtains
D.Always assume the worst outcome in cases of uncertainty
CÂU 15:
Which TWO of the following might indicate that an assurance client could be
higher than normal inherent or control risk?
A.Poor recent performance
B.Strong internal controls
C.Unusual transactions
D.The existence of an internal audit department
CÂU 16:
Which THREE of the following procedures should be carried out after the audit
firm has decided to accept appointment as auditor?
A.Ensure that the outgoing auditors' removal/resgination has been properly
conclucted
B.Ensure that a resolution has been passed at the general meeting to appoint the
new auditors
C.Perform checks to ensure that there are no legal or ethical reasons why the
new audit firm cannot act as auditor
D.Submit a letter of engagement to the directors
CÂU 17:
The definition of the risk of material misstatement is 'Inherent Risk × Control
Risk × Detection Risk'. Is this statement true or false?
A.True
B.False
CÂU 18:
For each of the following factors at a prospective client seclect whether that
factor indicates that client is high risk or low risk: Company currently has no
finance director
A.High risk
B.Low risk
CÂU 19:
Performance materiality levels are higher than the materiality for the financial
statements as a whole. Is this statement true or false?
A.True
B.False
CÂU 20:
The higher the risk of material misstatement the more likely it is that the auditor
will decide to perform substantive procedures during the interim audit rather
than at the period end?
A.True
B.False
CÂU 21:
The auditor of A Co wishes to reduce audit risk. Which of the following actions
could the auditor take to achieve this?
(1) Increase sample sizes
(2) Reduce control risk
(3) Assign more experienced staff to the engagement team
A.(1) only
B.(2) only
C.(1) and (3)
D.(2) and (3)
CÂU 22:
Which of the following statements about materiality are correct?
(1) Information is material if its omission or misstatement could influence the
economic decisions of users of the financial statements.
(2) Materiality is based on the auditor's experience and judgement.
(3) Materiality is always based on revenue.
(4) Materiality should only be calculated at the planning stage of the audit.

A.(1), (2) and (3)

B.(1), (3) and (4)
C.(1) and (2)
D.(2) and (4
CÂU 23:
For each of the following factors at a prospective client select whether that
factor indicates that client is high risk or low risk: Company carries out unusual
transactions
A.High risk
B.Low risk
CÂU 24:
For each of the following statements seclect whether they are True or false in
respect of the audit engagement letter: The engagement letter should be sent
after the appointment of the auditor but before the commencement of the audit
A.True
B.False
CÂU 25:
Which of the following procedures must the auditor use to obtain an
understanding of the entity and its environment in accordance with ISA 315-
Identifying and assessing the risks of material misstatement through
understanding the entity and its environment?
(1) Analytical procedures
(2) Inquiry
(3) Confirmation
(4) Reperformance
A.(1), (2) and (3)
B.(1) and (2)
C.(2), (3) and (4)

BÀI 3
CÂU 1:
Audit risk can be a split into three components: inherent risk; control risk and
detection risk. For each of the following examples, select the types of risk
Illustrated: The organisation has a number of estimate in its financial statements.
A.Inherent
B.Control
C.Detection
CÂU 2:
For of the following statements, select whether they are true or false in respect
of the concept of materiality: Materiality should be considered when planning
audit procedures and when evaluating discovered misstatement
A.True
B.False
CÂU 3:
Audit risk can be a split into three components: inherent risk; control risk and
detection risk. For each of the following examples, select the types of risk
Illustrated: The organisation has a high turnover of staff in the accounts
department
A.Inherent
B.Control
C.Detection
CÂU 4:
In each of the following case, select whether inherent riskn is higher or lower
than normal: The company operates a profit related by scheme:
A.Inherent risk higher than normal
B.Inherent risk lower than normal
CÂU 5:
Audit risk can be split into three components: inherent risk, control risk and
detection risk.
For the following example, seclect the types of risk illustrated: The organisation
operates in a fast - moving, high tech enviroment
A.Inherent risk
B.Control risk
C.Detection risk
CÂU 6:
Which two of the following would be used in understanding the entity in
accordance with ISA 315?
A.Industry, regulatory and other external factors
B.A preliminary review of internal controls
C.The results of tests of details
D.The results of a review events after the date of the financial statements
CÂU 7:
Which ONE of the following best describes the principal difference between
fraud and errors?
A.Fraud may result in the financial statements being material misstated
B.Fraud is an intentional act whereas error is unintentional
C.A misstatement can be material whether it is caused by fraud or by error
D.Fraud may be the result of negligence whereas error is unintentional
CÂU 8:
Which TWO of the following options are signs of overtrading?
A.Inventory decreasing
B.Cash decreasing
C.Payalbe decreasing
D.Receivalbes increasing
CÂU 9:
For the following statements, select whether they are true or false in respect of
the concept of materiality.
Materiality may depend on either the nature of an item or its monetary amount
A.True
B.False
CÂU 10:
Which of the following statements are correct with regard to the relationship
between the audit plan and the audit strategy for an external audit engagement?
(1) The audit plan should be developed before the audit strategy is established.
(2) The audit plan and the audit strategy should be established and developed
at the same time.
(3) The overall audit strategy should be more detailed than the audit plan.
(4) The audit strategy should be established before the audit plan is developed.
A.(1) and (3)
B.(2) only
C.(3) and (4)
D.(4) only
CÂU 11:
For of the following statements, select whether they are true or false in respect
of the concept of materiality: materiality may depend on the size of the error in
the context of its omission or misstatement
A.True
B.False
CÂU 12:
Which of the following factors influence the form and content of audit working
papers?
(1) Risks of material misstatement
(2) Exceptions identified
(3) Nature of the package used for documentation
(4) Cost to the audit

A.(1), (2) and (4)

B.(1), (3) and (4)
C.(1) and (2)
D.(2) and (4)
CÂU 13:
For each of the following statements, select whether they are true or false in
respect of the concept of materiality: Once established, the materiality level
initially set cannot be revised during the course of the audit
A.True
A.False
CÂU 14:

Advertising

A.Warrents futhur testing

B.No futher testing required

CÂU 15:
Is the following statement regarding audit evidence true or false?
Appropriateness is the measure of the quality of audit evidence.
A.True
B.False
CÂU 16:
In the following case, select whether inherent is higher or lower than normal:
Inventory is largest balance on the statement of financial position
A.Inherent risk higher than normal
B.Inherent risk lower than normal
CÂU 17:
Which of the following statements correctly describes the principal purpose of
an external audit of a limited company?
A.To assist in the preparation of the company's financial statements
B.To prevent fraud within the company
C.To examine and express an opinion on the company's financial statements
D.To assist the directions in improving the company's financial reporting
process
CÂU 18:
Which one of the following is normally designed to detect possible material
monetary errors in the figures in financial statements?
A.Test of control
B.Walk - through test
C.Analytical procedure
D.Observation of a procedures
CÂU 19:
In each of the following case, select whether inherent risk is higher or lower
than normal: Financial statements contain balances with straighfoward
Financial Accounting requirements
A.Inherent risk higher than normal
B.Inherent risk lower than normal
CÂU 20:
For the following statements, select whether they are true or false in respect of
the concept of materiality.
Materiality is a matter of professional judgment
A.True
B.False
CÂU 21:
Audit risk can be a split into three components: inherent risk; control risk and
detection risk. For each of the following examples, select the types of risk
Illustrated: Directors' pay is related to company profitability
A.Inherent
B.Control
C.Detection
CÂU 22:
Audit risk can be split into three components: inherent risk, control risk and
detection risk.
For the following example, seclect the types of risk illustrated: The organisation
has few employees in its accounting department.
A.Inherent risk
B.Control risk
C.Detection risk
CÂU 23:
Repairs and renewals

A.Warrents futhur testing

B.No futher testing required
CÂU 24:
Select the MOST appropriate approach which should be used by the assurance
firm in the given circumstance.
The auditor of a new client, recently started up, with few employees in its
accounting department?
A.Test of control only
B.Substantive procedures only
C.A mix of tests of control and substantive procedures
CÂU 25:
What are the purposes of planning the audit?
(1) To ensure appropriate attention is devoted to different areas of the audit
(2) To identify potential problem areas
(3) To facilitate delegation of work to audit team members
(4) To ensure the audit is completed within budget and time restraints

A.(1), (2), (3) and (4)

B.(1), (3) and (4)
C.(1), (2) and (3)
D.(2) and (3)
CÂU 26:
For each of the following statements, select whether they are true or false in
respect of the concept of materiality: material should be calculated at the
planning stage of all audits
A.True
B.False
CÂU 27:
In the following case, select whether inherent is higher or lower than normal:
The company has recently listed on the local stock exchange with high profit
expectations from analysts.
A.Inherent risk higher than normal
B.Inherent risk lower than normal
CÂU 28:
Which TWO of the following are true in respect of related party transactions?
A.Related party transactions tend to be low-risk to the auditor
B.Disclosure of related party transactions is unlikely to be material to the
financial statements
C.Related party transactions must be competely disclosed in the financial
statements
D.There may be a significant control risk in relation to related party transactions
CÂU 29:
For the following statements, select whether they are true or false in respect of
the concept of materiality.
Materiality depends only on the monetary amount of an item?
A.True
B.False
CÂU 30:
Which three of the following would normally be included in the overall audit
strategy?
A.Details of economic factors and industry conditions
B.The results of initial analytical procedures
C.Confirmation of management's responsibility for the financial statements
D.Identification of specific audit risks
CÂU 31:
Audit risk can be a split into three components: inherent risk; control risk and
detection risk. For each of the following examples, select the types of risk
Illustrated: The auditor will be using samples in testing
A.Inherent
B.Control
C.Detection
CÂU 32:
Select the MOST appropriate approach which should be used by the assurance
firm in the given circumstance.
The auditor of a long - standing client with a sophisticated IT system and an
internal department?
A.Test of control only
B.Substantive procedures only
C.A mix of tests of control and substantive procedures
CÂU 33:
In the following case, select whether inherent is higher or lower than normal:
The company operates in a slow - moving, stable industry
A.Inherent risk higher than normal
B.Inherent risk lower than normal
CÂU 34:
For of the following statements, select whether they are true or false in respect
of the concept of materiality: Materiality is always expressed as a proportion of
profit
A.True
B.False

CÂU 35:
Which three of the following would increase inherent risk
A.Sample size have been calulated incorrectly by the auditor and are too small
B.A significant number of balances are based on estimates
C.The financial statements include complex transactions
D.Audit staff are inexperienced
E.A company is seeking to raise Finance
CÂU 36:
With respect to ISA 315, which three of the following procedures shall be used
in understanding the entity and its environment
A.Inquiries of management and others within the entity
B.Inquiries the third party
C.Analytical procedures
D.Observation and Inspection
CÂU 37:
Which one of the following does setting a preliminary materiality threshold not
help auditors to decide?
A.What audit staff to assign to the audit
B.How many items to examine
C.Whether to use sampling
D.What level of errors is likely to lead the auditor not being able to give an
unqualified opinion
CÂU 38:
Which three of the following constitutes analytical procedures
A.Considerations of comparable comparable information for prior periods
B.Considerations of relationships between elements of financial information
that are expected to conform to a predicted pattern
C.Consideration of whether a balance has been calculated correctly
D.Consideration of similar industry information
CÂU 39:
Which three of the following are of the objectives of the audit planning
A.To determine the scope of the engagement
B.To ensure appropriate attention it devoted to the important areas of the audit
C.To identify potential problems and resolve them on the timely basis
D.To assign work to remembers of the audit team

CÂU 40:
Audit risk can be a split into three components: inherent risk; control risk and
detection risk. For each of the following examples, select the types of risk
Illustrated: Senior management regularly override the system of controls
A.Inherent
B.Control
C.Detection
CÂU 41:
In each of the following case, select whether inherent riskn is higher or lower
than normal: The business is of the company is cash - based
A.Inherent risk higher than normal
B.Inherent risk lower than normal
CÂU 42:
Which of the following would normally be included in the audit plan?
A.Reporting objectives
B.Industry-specific financial reporting requirements
C.Nature, timing, and the extent of planned risk assessment procedures
CÂU 43:
Audit risk can be a split into three components: inherent risk; control risk and
detection risk. For each of the following examples, select the types of risk
Illustrated: The organisation is seeking to raise finance for a new venture
A.Inherent
B.Control
C.Detection
CÂU 44:
Cost of sales:

A.Warrents futhur testing

B.No further testing required
CÂU 45:
ABC Ltd's quick ratio has fallen from 1.8:1 to 1.5:1.
Which ONE of the following might help to explain this decline?
A.The allowance for receivalbes has been reduced
B.Credit control has been poor
C.The entity has purchased a property for cash
D.Inventory levels have fallen

BÀI 4
CÂU 1:
Which ONE of the following is NOT a test that could be used by assurance
providers to provide evidence relating to a balance in the financial statement?
A.Walk-through test
B.Test of control
C.Test of detail
D.Analytical procedure
CÂU 2:
Which of the following is not a test of control?
A.Inspection of purchase order documentation to confirm that it has been
authorised
B.Review of monthly bank reconciliations performed by the audit client
C.Examination of purchase invoices for evidence of mathematical accuracy
checks
D.Agreement of the cost of non-current asset additions to purchase
documentation
CÂU 3:
Which of the following is NOT an inherent limitation of internal control
systems?
A.Insufficient segregation of duties
B.Possibility that employees may collude together fraudulently
C.Possibility of human error in undertaking tasks
CÂU 4:
Which of the following controls of a sales system ensure that all goods
despatched are completely and accurately invoiced?
A.Good despatched notes are matched to sales invoices
B.Sales invoices are sequentially numbered
C,Sales invoices are matched to customer orders
CÂU 5:
The following are types of test that might be carried out by an assurance
provider. For each example select the financial statement assertion that is being
tested:
Review of the financial statements using a Companies Act checklist
A.Existence
B.Completeness
C.Classification
CÂU 6:
One of the control objectives of the sales system of ABC Co is to ensure that
goods and services are sold to credit-worthy customers. Which of the following
control activities would assist ABC Co in achieving this objective?
A.All sales orders are based on authorised price lists.
B.Credit limits are checked before sales orders are accepted.
C.Overdue debts are chased each month by the credit controller.
D.The aged-debt listing is reviewed by the finance director on a monthly basis
CÂU 7:
The level of assurance given by an assurance engagement will depend on the
type of engagement.
For each of the following examples, select the level of assurance you would
expect to be given:
Report on prospective financial information
A.Absolute
B.Reasonable
C.Limited
CÂU 8:
Which THREE of the following are assertions used by the auditor about classes
of transactions?
A.Occurence
B.Existence
C.Completeness
D.Cut - off
CÂU 9:
For each of the following situations select the most appropriate approach which
should be used by the assurance firm in the given circumstances:
The auditor of a client where controls have been assesed as deficient.
A.Test of controls only
B.Substantive procedures only
C.A mix of test of controls and substantive procedures
CÂU 10:
Two types of procedures used in gathering evidence are test of controls and
substantive procedures.
For each of the following examples select the type of procedure illustrated.
Observation of opening the post
A.Test of control
B.Substantive procedure
CÂU 11:
Which of the following procedures are TESTS OF CONTROL an auditor
should perform in testing the inventory cycle of their client whilst attending the
inventory count?
(1) Observe whether the client’s staff are following the inventory count
instructions
(2) Review inventory present in the warehouse for evidence of damage or
obsolescence
(3) Obtain a sample of the last goods received notes and goods despatched notes
and follow through to ensure inclusion in the correct accounting period
(4) Inspect and review management’s inventory count instructions

A.2 and 3
B.1 and 4
C.1 and 2
D.3 and 4
CÂU 12:
Which of the following controls helps to ensure that payroll payments are only
made to bona fide employees?
(1) Personnel records maintained for all employees
(2) Comparison of bank transfer listing with payroll
(3) Segregation of duties between staff involved in human resources and payroll
functions
(4) Reperformance of the calculation of a sample of payroll deductions

A.(1) and (2)

B.(1) and (3)
C.(2) and (4)
D.(3) and (4)
CÂU 13:
For each of the following statements select whether they are true of false in
respect of substanctive procedures.
The auditor only carry out substantive procedures if the results of test of
controls are inconclusive
A.True
B.False
CÂU 14:
The following are types of test that might be carried out by an assurance
provider. For each example select the financial statement assertion that is being
tested:
Tracing non- current assets which have been observed in use back to the
non-current asset register:
A.Existence
B.Completeness
C.Classification
CÂU 15:
The level of assurance given by an assurance engagement will depend on the
type of engagement.
For each of the following examples, select the level of assurance you would
expect to be given:
Report on review of interim financial information
A.Absolute
B.Reasonable
C.Limited
CÂU 16:
Which TWO of the following are assertions used by the auditor about account
balances at the period end?
A.Existence
B.Accuracy
C.Cut-off
D.Completeness
CÂU 17:
Two types of procedures used in gathering evidence are test of controls and
substantive procedures.
For each of the following examples select the type of procedure illustrated.
Reviewing invoices paid for evidence of authorisation
A.Test of control
B.Substantive procedure
CÂU 18:
The draft financial statements of ABC Co show the following information:
Revenue 840
Cost of sales 540
Gross profit 300
Trade receivables 360
Trade payables 260
What is the receivables collection period?
A.156 days
B.175 days
C.758 days
D.958 days
CÂU 19:
For each of the following statements select whether they are true of false in
respect of substanctive procedures.
The auditor must carry out substantive procedures on all material items
A.True
B.False
CÂU 20:
Which THREE of the following statements are valid?
A.Positive assurance will be given on a statutory audit assignment
B.Positive assurance requires more rigorous work to be undertaken than
negative assurance does
C.Positive assurance will be given on a review assignment
D.Negative assurance is assurance given in the absence of any indications to the
contrary
CÂU 21:
ISA 315 Identifying and Assessing the Risks of Material Misstatement through
Understanding the Entity and Its Environment sets out the five components of
internal control. Which of the following is NOT set out as a component of
internal control within ISA 315?
A.Control environment
B.The information system relevant to financial reporting
C.Human resource policies and practices
CÂU 22:
Which TWO of the following descirbe manifestations of the expectations gap
A.Users blaming the auditors for a fraud discovered in a company subsequent to
an audit
B.Users discovering that the directors refuse to cooperate in providing the
auditor with the evidence he requests
C.Shareholders approving the appointment of the auditor at an annual general
meeting
D.Users relying on the audited financial statements as a fair valuation of the
company
CÂU 23:
For each of the following statements select whether they are true of false in
respect of substanctive procedures.
Substantive procedures include both analytical procedures and test of details
A.True
B.False
CÂU 24:
The level of assurance given by an assurance engagement will depend on the
type of engagement.
For each of the following examples, select the level of assurance you would
expect to be given:
Statutory audit ( KIỂM TOÁN BẮT BUỘC)
A.Absolute
B.Reasonable
C.Limited
CÂU 25:
Which TWO of the following are assertions used by the audito about
presentation and disclosure?
A.Allocation
B.Accuracy
C.Cut-off
D.Completeness
CÂU 26:
Which TWO of the following are valid comments about the quality of assurance
evidence?
A.Evidence from external sources is more reliable than evidence obtained from
the entity's records
B.Evidence from internal sources is more reliable when related internal controls
operate effectively
C.Evidence from internal sources is more reliable than evidence created by the
assurance provider
D.Photocopies are more reliable than facsimiles
CÂU 27:
An effective internal control system provides the auditor with absolute
assurance that control objectives have been achieved
A.True
B.False
CÂU 28:
Two types of procedures used in gathering evidence are test of controls and
substantive procedures.
For each of the following examples select the type of procedure illustrated.
Calculation of the gross profit margin and comparison with that of the previous
accounting period
A.Test of controls
B.Substantive procedure
CÂU 29:
Which of the following methods of recording an accounting and controls system
is a series of questions used to determine whether controls exist which meet
specific control objectives?
A.Internal control questionnaire
B.Narrative
C.Flowchart
CÂU 30:
For each of the following situations select the most appropriate approach which
should be used by the assurance firm in the given circumstances:
The auditor of a client where controls have been assesed as strong
A.Test of controls only
B.Substantive procedures only
C.A mix of test of controls and substantive procedures

BÀI 5:
1.Which ONE of the following is not part of an entity's risk assessment
process?
Report the process to the auditors
2.Which ONE of the following is NOT a general control?
Procedures for resubmission of rejected data

3.Which one of the following would be the simlpest way of recording a

straightforward system not subject to a great deal of change annually?
Narrative notes

4.Which TWO of the following represent inherent limitations of a system of

internal control?
Lack of understanding of the purposes of controls
The possibility that staff members will collude in fraud

5.Which TWO of the following will reduce password effectiveness as a

means of restricting access to a computer system?
User selection of passwords
Displaying the password on screen

6.Which TWO of the following are reasons why organisations need to have
effective systems of control?
To assist the organisation in
Minimising business risks
Minimising business risks

7.Which TWO of the following are authorisation control activities

A bank reconciliation signed by the finance director
A cheque payment run approved by the finance director

8.Which Three of the following would be the best sources of information

about a company's systems?
The company's procedures manual
The internal audit function's system notes
Inquiries made of company staff

9.Which THREE of the following statements about audit committees are

correct?
Listed companies are required to have an audit committee
 Audit committees are considered to be good practice for all large
companies
Audit committees are an important aspect of a company's control
enviroment

10.One of the five elements of internal controls is monitoring of controls.

Which TWO of the following are activities which would be used to monitor
controls
Management's review of whether bank reconciliations are being prepared
on a timely basis
Internal auditor's evaluation of whether the sales team are following
company policy regarding customer discounts

11.In each of the following three cases, select whether control risk is higher
or lower than normal.
The company has a history of reviewing financial performance on a regular
basis at board level
Control risk is lower than normal

12.In each of the following three cases, select whether control risk is higher
or lower than normal.
The company has an established and well resourced internal audit function
Control risk is lower than normal

13.In each of the following three cases, select whether control risk is higher
or lower than normal.
Purchase invoices are not authorised prior to payment
Control risk is higher than normal
14.In each of the following three cases, select whether control risk is higher
or lower than normal:
(1) The paybles ledgers is not regularly reconciled to the payables ledger
control account
Control risk is higher than normal

15.In each of the following three cases, select whether control risk is higher
or lower than normal:
(2) Management often override internal controls
Control risk is higher than normal

16.In each of the following three cases, select whether control risk is higher
or lower than normal:
(3) Entry to the inventory storeroom is only for authorised personnel
Control risk is lower than normal

17.The following are examples of computer controls which operate at PQ

plc.
For the example, select the type of computer control which it illustrates:
Storing extra copies of programs and data files off-site
General

18.The following are examples of computer controls which operate at PQ

plc.
For the example, select the type of computer control which it illustrates:
Manual checks to ensure that input data was authorised
Application

19.The following are examples of computer controls which operate at PQ

plc.
For the example, select the type of computer control which it illustrates:
Programmes to check data fields on input transactions
Application

20.The following are examples of computer controls which operate in the

payroll system at ABC Ltd.
For example, select the type of computer control which it illustrates:
Password protection limiting access to data
General

21.The following are examples of internal controls which operate at ABC

Ltd.
For example, select the type of control activity which it illustrates: The
finance director compares monthly expenditure on consumables to
budgeted expenditure
Performance review

22.The following are examples of internal controls which operate at ABC

Ltd.
For example, select the type of control activity which it illustrates: The
financial accountant signs the bank reconciliation, which has been
prepared by a member of his staff.
Authorisation

23.The following are examples of internal controls which operate at ABC

plc.
For each example, select the type of control activity which it illustrates: The
financial controller counts petty cash on a monthly basis
Physical control

24.The following are examples of internal controls which operate at ABC

plc.
For example, select the type of control activity which it illustrates: The
financial controller reconciles the payables ledger to the payables ledger
control account on a monthly basis
Information processing

25.The following are examples of internal controls which operate at ABC

plc.
For each example, select the type of control activity which it illustrates:
There are two keys to the locked finance department safe: one held by the
finance director and the other by the managing director
Physical control
26.The following are examples of computer controls which operate in the
payroll system at ABC Ltd.
For example, select the type of computer control which it illustrates:
Manual checks to ensure that timesheets are authorised before details are
processed
Application

27.The following are examples of computer controls which operate in the

payroll system at ABC Ltd.
For example, select the type of computer control which it illustrates: Range
checks on payroll processing
Application

28.The following are examples of internal controls which operate at XYZ

plc.
For each example, select the type of control activity which it illustrates: The
controller reconciles the receivables ledger to the receivables control
account montly
Information processing

29.The following are examples of internal controls which operate at XYZ

plc.
For each example, select the type of control activity which it illustrates: The
receivables ledger clerk posts invoices to the receivables ledger. The cash
book clerk posts cash receipts to the receivables ledger
Segregation of duties

30.The following are examples of internal controls which operate at ABC

plc.
For example, select the type of control activity which it illustrates: The
payables ledger clerk posts invoices to the payables ledger. The cash book
clerk posts cash receipts to the payables ledger
Segregation of duties

31.According to ISA 315 which THREE of the following are respects of an

entity's control environment?
The attitude of the directors to internal controls
 The awareness of internal control issues in the company
The actions of senior management in relation to internal control

32.Which regards to internal control systems in small entities, select

whether each of the following statements is true or false:
Smaller companies are more likely to be successful in the implementation
of segregation of duties controls
False

33.Which regards to internal control systems in small entities, select

whether each of the following statements is true or false:
Management override is more likely to take place in smaller companies
True

34.ABC plc is large organisation with a complex accounting and

information system. Critical to an understanding of the system are the
reporting lines and relationships between different departments.
In this situation which ONE of the following methods is most likely to be
used by the auditor to record the system of document flow?
Flowcharts

35.Most entities make use of IT systems for financial reporting and

operational purposes. Controls operating in an IT environment can be split
into general controls and application controls.
Which ONE of the following is an application control?
Cyclical reviews of all master files

36.Most entities make use of IT systems for financial reporting and

operational purposes. Controls operating in an IT environment can be split
into general controls and application controls.
Which ONE of the following is an application control?
Authorisation of data for input

37.ISA 315 states that an internal control system in an organisation consists

of five components: the control environment, the entity's risk assessment
process, the information system, control activities and monitoring of
controls.
For each of the following examples select the component which it
illustrates: Review of actual performance against budget
Control activity

38.ISA 315 states that an internal control system in an organisation consists

of five components: the control environment, the entity's risk assessment
process, the information system, control activities and monitoring of
controls.
For each of the following examples select the component which it
illustrates: The entity's organisational structure
Control environment

39.ISA 315 states that an internal control system in an organisation consists

of five components: the control enviroment, the entity's risk assessment
process, the information system, control activities and monitoring of
controls.
For each of the following examples, select the component which it
illustrates:
Locking the inventory storeroom.
Control activities

40.ISA 315 states that an internal control system in an organisation consists

of five components: the control environment, the entity's risk assessment
process, the information system, control activities and monitoring of
controls.
For each of the following examples select the component which it
illustrates: Review by management of monthly bank reconciliations
Monitoring of controls.

41.ISA 315 states that an internal control system in an organisation consists

of five components: the control enviroment, the entity's risk assessment
process, the information system, control activities and monitoring of
controls.
For each of the following examples, select the component which it
illustrates:
The process of preparing the financial statements.
Information system
42.ISA 315 states that an internal control system in an organisation consists
of five components: the control environment, the entity's risk assessment
process, the information system, control activities and monitoring of
controls.
For each of the following examples select the component which it
illustrates: Training programme for all staff
Control environment

43.For each of the following statements select whether they are true or
false in respect of the limitations of a system of internal control.
Internal controls are only applied to material items
False

44.For each of the following statements select whether they are true or
false in respect of the limitations of a system of internal control.
The cost of implementing controls may be more expensive than the cost of
any potential risk arising
True

45.For each of the following statements select whether they are true or
false in respect of the limitations of a system of internal control.
The effectiveness of many controls rely on the integrity of those applying
them
True

46.For each of the following statements select whether they are true or
false in respect of the limitations of a system of internal control.
Standard controls may not be designed to deal with unusual transactions
True

47.For each of the following statements, select whether they are true or
false in respect of the information system in a company.
The information system companies only the IT system in a company
False
48.For each of the following statements, select whether they are true or
false in respect of the information system in a company.
The information system includes the process of preparing the financial
statements, such as the production of journals
True

49.For each of the following statements select whether they are true or
false in respect of business risk:
Business risk is of no relevance to the auditor. The auditor is only
concerned with audit risk
False

50.For each of the following statements select whether they are true or
false in respect of business risk:
Business risk is the risk inherent to the company in its operations.
True

51.For each of the following statements select whether they are true or
false in respect of business risk:
Management are responsible for identifying and controlling business risks
True

52.For each of the following internal controls, which is the principal

limitation?
Segregation of duties in a sales system
Collusion

53.For each of the following internal controls, which is the principal

limitation?
The preparation of a bank reconciliation
Human error

54.An audit committee is a committee with responsibility for audit related

matters.
Which ONE of the following should be members of an audit committee?
Non-executive directors only
55.An effective system of internal control requires segregation of basic
functions.
Which THREE of the following functions should ideally be segregated?
Authorisation of transactions
Custody or handling of assets
Recording of transactions

BÀI 6
CÂU 1:
Misstatements can arise from error or fraud. Which of the following statements
is correct regarding the auditor's accumulation of identified misstatements?
A The auditor must accumulate all misstatements identified during the audit.
B The auditor must only accumulate individually material misstatements
identified during the audit.
C The auditor must accumulate misstatements identified during the audit, other
than those that are clearly trivial
CÂU 2:
ABC Co has a year end of 31 December 20X4. The auditor has identified that
management's assessment of ABC Co's ability to continue as a going concern
covers the period to 30 June 20X5.
What action should the auditor take?
A.Request that management extends the assessment period to 31 December
20X5
B,Request that management extends the assessment period to 31 December
20X6
C.Request that management extends the assessment period to 30 September
20X5
D.No action is required provided the auditor is satisfied with the management's
assessment to 30 June 20X5
CÂU 3:
The majority of the books and records of Q Co have been destroyed by a flood
and the auditor has no other realistic means of obtaining sufficient, appropriate
audit evidence. Which form of opinion will the auditor issue?
A An adverse opinion
B A disclaimer of opinion
C Qualified opinion on the basis that sufficient appropriate evidence is not
available
D Unmodified opinion with an emphasis of matter paragraph explaining the
circumstances of the flood.
CÂU 4:
The auditor may wish to draw the users' attention to a matter which is not
presented or disclosed in the financial statements but which is relevant to the
users' understanding of the auditor's report. How would this affect the auditor's
report?
A An emphasis of matter paragraph would be included.
B The audit opinion would be qualified.
C An other matters paragraph would be included.
D The auditor's report would not be affected as the auditor's report only refers to
matters presented or disclosed in the financial statements.
CÂU 5:
The auditor of B Co has concluded that inventory is overstated as a number of
lines have not been valued at the lower of cost and net realisable value. The
overstatement is material but not pervasive to the financial statements.
Management has refused to make an adjustment to the financial statements.
What form of modified opinion should the auditor issue?
A Adverse opinion
B Disclaimer of opinion
C Qualified opinion due to a material misstatement
D Qualified opinion due to insufficient appropriate evidence on which to base
an opinion
CÂU 6:
The statement of financial position of R Co includes a material amount of
$300,000 in respect of costs capitalised in the year as development expenditure.
The auditor has concluded that these costs are research expenditure. If the
auditor is to issue an unmodified opinion which financial statements will require
adjustment?
A Statement of financial position only
B Statement of profit or loss only
C Statement of financial position and statement of profit or loss
D Neither the statement of financial position nor the statement of profit or loss
CÂU 7:
The financial statements of Z Co include a receivables balance of $20,000
which the auditors do not believe will be recovered. Materiality has been set at
$100,000. There are no other unadjusted misstatements. What form of audit
opinion would be issued by the auditor?
A Adverse opinion
B Unmodified opinion
C Disclaimer of opinion
D Qualified opinion due to overstatement of receivables
CÂU 8:
The auditor of Y Co has concluded that Y Co is not a going concern. The
financial statements have been prepared on a going concern basis and
management has refused to change them. What form of audit opinion will be
issued by the auditor?
A An unmodified opinion
B A qualified 'except for' opinion due to material misstatement
C A qualified 'except for' opinion due to insufficient appropriate audit evidence
D An adverse opinion
CÂU 9:
Is the following statement true or false?
The audit engagement partner must review all audit documentation before the
date of the auditor's report, in order to ensure that sufficient and appropriate
audit evidence has been obtained to support the audit opinion.
A.True
B.False
CÂU 10:
The auditor of S Co has concluded that the use of the going concern assumption
is appropriate and that the material uncertainty has been adequately disclosed.
What is the impact of this conclusion on the auditor's report?
A Adverse opinion
B Qualified opinion
C Unmodified opinion without an emphasis of matter paragraph
D Unmodified opinion with an emphasis of matter paragraph
CÂU 11:
'Auditors have no obligations to perform procedures or make enquiries
regarding the financial statements after they have been issued.'
Is this statement true or false?
A.True
B.False
CÂU 12:
ISA 700 Forming an opinion and reporting on financial statements sets out the
basic elements of an auditor's report. Which of the following is not included in
an unmodified auditor's report?
A Management's responsibility for the financial statements
B Auditors' responsibilities
C Audit opinion
D Deficiencies of internal controls
CÂU 13:
Due to disruptions caused by the recent transition to a new accounting system,
one month of ABC Co's inventory records have been lost. The auditors
performing the statutory audit for the twelve- month period have determined
that the possible effects of undetected misstatements could be material, but not
pervasive.
What form of audit opinion would the auditor give?
A.Qualified opinion
B.Unmodified opinion with emphasis of matter paragraph
C.Adverse opinion
D.Disclaimer of opinion
CÂU 14:
What is the "Auditor Opinion" if the auditor believes that the company's
financial statements are sound and free from material misstatements?
A.Qualified
B.Unqualified/ Unmodified
C.Adverse
D.Emphasis of matter
CÂU 15:
P Co is being sued by a customer for the supply of faulty products. At the year
end the outcome of the legal case is still uncertain. The directors have fully
disclosed the matter as a contingent liability and the auditors are satisfied with
the treatment and the level of disclosure. The auditors have concluded that the
uncertainty is fundamental to the understanding of the financial statements.
What form of audit opinion would the auditor give?
A Disclaimer
B Unmodified opinion with an emphasis of matter paragraph
C Unmodified opinion without an emphasis of matter paragraph
D Qualified opinion
CÂU 16:
This Auditor Opinion means that the auditor believes that in general the
financial statements can be relied upon with certain exceptions
A.Qualified
B.Unqualified
C.Adverse
D.Emphasis of matter
CÂU 17:
ABC Co has a substantial bank loan which is due to mature in 20X7, and the
company plans to negotiate for a new loan in March 20X7. The auditors
concluded that the company's use of the going concern assumption in the
financial statements for the year ended 31 December 20X6 is appropriate.
However, they believe there is a material uncertainty related to going concern,
which has been appropriately disclosed in the financial statements.
What action should the auditor take with regards to going concern in the
auditor's report?
A.Express an unmodified opinion and describe the material uncertainty in the
other matter paragraph
B.Express an unmodified opinion and describe the material uncertainty in the
emphasis of matter paragraph
C.Express a modified opinion and describe the material uncertainty in the
emphasis of matter paragraph
D.Express a qualified opinion and describe the material uncertainty in the basic
for the qualified opinion paragraph
CÂU 18:
ISA 705 Modification to the opinion in the independent auditor's report
identifies three possible types of modification. In which of the following
circumstances would a disclaimer of opinion be issued?
A.The auditor concludes that the financial statements include misstatements
which are material but not pervasive to the financial statements.
B The auditor concludes that the financial statements include misstatements
which are both material and pervasive to the financial statements.
C The auditor has not been able to obtain sufficient appropriate audit evidence
on which to base an opinion but has concluded that the possible effects of any
undetected misstatements could be material but not pervasive .
D The auditor has not been able to obtain sufficient appropriate audit evidence
on which to base an opinion and has concluded that the possible effects of any
undetected misstatements could be both material and pervasive.
CÂU 19:
An emphasis of matter paragraph is used in an audit report to draw attention to a
matter affecting the financial statements. Which two of the following are
correct in relation to an Emphasis of Matter Paragraph in the Auditor's Report?
(1) It is used when there is a material uncertainty.
(2) It constitutes a modified audit opinion.
(3) The auditor's report is referred to as an unmodified report.
(4) The matter is deemed to be fundamental to the users understanding of the
financial statements.

A (1) and (2)

B (1) and (4)
C (1) and (3)
D (2) and (4)
CÂU 20:
The auditor of Q Co has completed the audit and has concluded that sufficient
appropriate evidence has been obtained, which confirms that the financial
statements are not materially misstated. Which form of audit opinion will the
auditor issue?
A Adverse opinion
B Qualified opinion
C Unmodified opinion
D A disclaimer of opinion