REVISION LECTURE PAST EXAMS QUESTIONS: These questions are for practice only. They are not at all an indication of the questions on the actual exams. All topics need to be revised from topic 4 onwards for the exam. These questions and possible answers will be discussed during revision lecture. Solution will not be provided on the learning hub.
Section A (Short answer)
1. List and briefly explain four factors that contribute to the need for financial report audits. Increasing reliability, increase confidence of investor,
1,Complexity of information, 2,remoteness of information, have enough information; 3,conflicts of interest, if management are providing some information to shareholders, but shareholders don’t believe this information, 4,consequence providing wrong information to users. 2. How is materiality (and immateriality) related to the proper presentation of financial statements? Start with what is materiality
Proper presentation of FS is complying with acct standards, true information. in terms of true and fair the amount is correct, no mistake. Any mistake, which like is more than this level, we will considered as material mistake, and auditor can collect and find evidence all the amount and transactions are true and fair. 3. Provide a definition of subsequent events. List the types of events that require consideration by management and evaluation by the auditor and give an example of each. Definition. Type 1 and type 2. Difference.
4. List the types of audit tests and how they relate to the audit risk model. TOC, substantive test, analytical procedure, test of details AR=IR, CR, and DR TOC: check the effectiveness of internal control , CR high –predominately substantive procedure, more reliance on detailed substantive test. CR low—lower assessed level of control risk approach, more TOC, reduced reliance on substantive test. 5. ASA 700 requires the auditor to form an opinion on the financial statement of the entity...
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