ACCA F8 Audit Test - Answers
-
Upload
kumassa-kenya -
Category
Documents
-
view
258 -
download
1
Transcript of ACCA F8 Audit Test - Answers
7/27/2019 ACCA F8 Audit Test - Answers
http://slidepdf.com/reader/full/acca-f8-audit-test-answers 1/4
F8 – Answers to Revision Test Answer 1
Which of the following is a test of control and which a substantive test?
A ToC has to test a control. The auditor tracing amounts, comparing amounts, inspectingassets are not internal controls
Answer 2
Total assets = $10m. What is the preliminary estimation of materiality?
1 – 2% ie $100,000 to $200,000
Answer 3
If a preliminary estimation of materiality is $2m, is performance materiality more likely to be$1m or $3m?
$1m – performance materiality is a more rigorous test
ToC ST
20 purchase invoices for expenses amounts are traced to debit entries in theappropriate nominal ledger accounts.
!
Expenses are compared to similar expenses in the previous year. !
20 purchase invoices are inspected to see if they had been stamped‘Approved for payment’ by the chief accountant
!
20 cars are inspected to see if they exist !
15 Capital expenditure authorisations for purchases over $1,000 areinspected to see if they have been signed-off by the finance director
!
15 capital expenditure invoices are traced to the appropriate non-currentasset and VAT accounts
!
Depreciation calculations are re-performed by the auditor !
10 records in the fixed asset register are inspected to verify that the assetswere physically inspected within the last 12 months.
!
The receipt of goods into the factory is observed to ensure that deliveriesare counted by staff upon receipt
!
The auditor inspects inventory to see if any appears damaged. !
7/27/2019 ACCA F8 Audit Test - Answers
http://slidepdf.com/reader/full/acca-f8-audit-test-answers 2/4
Answer 4
An internal control system is found not to be operating effectively. Which of the following isthe appropriate audit response?
(a)
Carry out more tests of control
(b) Carry out more substantive tests "
Answer 5
Which three of the following terms are the odd ones out?
Honesty, objectivity, confidentiality, independence, secrecy, professional competence anddue care, professional behaviour, integrity
[Note: see the ACCA’s fundamental ethical principles]
Answer 6
The question “Can non-current assets be bought without proper authorisation?” is anexample of:
(a) A control objective "(b) A control procedure
and would the question be found on an
(a) ICQ
(b) ICEQ? "
Answer 7
What are the preconditions of an audit?
(a) An acceptable financial reporting framework (b) Management accepts the premise of an audit
7/27/2019 ACCA F8 Audit Test - Answers
http://slidepdf.com/reader/full/acca-f8-audit-test-answers 3/4
Answer 8
Are the following methods of sampling statistical or non-statistical?
Answer 9
Fill in the blanks:
Answer 10
What are the 5 elements of an assurance engagement? (a) A three party arrangement (responsible party, person to whom to report, practitioner) (b) Suitable criteria (c) Sufficient appropriate evidence (d) Appropriate subject matter (e) A written report in the prescribed form
Statistical Non-statistical
Block sampling !
Monetary unit sampling !
Random sampling !
Haphazard sampling !
Internal auditors External auditors
Report to? Management/auditcommittee
Members
Employed by? Company, management/audit committee
An independent audit firm
Work determined by? Management/auditcommittee
Statute, ISAs, IFAC
Purpose of work? Test internal control, value
for money audits,investigate fraud – almostanything managementsrequires.
To collect sufficient
appropriate audit evidenceto be able to givereasonable assurance (orotherwise) that the FS arefree of materialmisstatement
7/27/2019 ACCA F8 Audit Test - Answers
http://slidepdf.com/reader/full/acca-f8-audit-test-answers 4/4
Answer 11
Indicate the relevance of the following list of assertions to the audit of
account balances, transactions and events, and presentation and disclosure:
Answer 12
Is the following statement true or false?
“A contingent liability is caused by a future event.”
False. It relates to a past event whose outcome will only be known upon some futureevent
Answer 13
What is wrong with the following description of an audit procedure?
“Inspect the cash book for amounts received after year end in respect of amounts
owing at year end.”
Audit procedures should state what assertion they are designed to verify.
Answer 14
Could a sharp fall in sales after year end be an adjusting event?
Yes, it could be. It might indicate that inventory at year end is not saleable and so itshould be written down.
Period end
balances
Transactions and
events
Presentation and
disclosure
Accuracy ! !
Completeness ! ! !
Cut-off !
Allocation !
Existence !
Classification ! !
Occurrence ! !
Valuation ! !
Rights andobligations
! !