ACA ICAEW Audit and Assurance Practice Exam

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• Which of the following is a key responsibility of the Money Laundering Reporting Officer (MLRO)?
• Which factor is NOT part of increasing professional skepticism?
• What is one of the auditor's responsibilities after the audit sign-off?
• Which of the following actions is prohibited for audit firms according to professional ethical standards?
• What does the concept of professional skepticism entail for auditors?
• What is the purpose of assigning extra or more experienced staff during audits?
• When is an auditor most likely to include an emphasis of matter paragraph?
• What is the primary purpose of the engagement letter?
• What should auditors do between year-end and signing off the audit report?
• In what situation would an auditor issue a qualified opinion related to audit evidence?
• Which service poses a self-review threat when provided to listed finance or investment companies?
• What is the primary purpose of an emphasis of matter paragraph?
• What is the initial step in the exam question technique for review assurance engagements?
• Which of the following describes a limitation that could lead to a modified opinion?
• What is one reason the main procedures of statutory audits differ from other assurance engagements?
• When should an auditor report suspicions of fraud to shareholders?
• During which phase should preliminary analytical procedures be utilized?
• Which action should be taken if money laundering is suspected?
• What is one step that can help bridge the expectation gap between management and auditors?
• What type of opinion should be given if financial statements are materially misstated but the misstatement is not pervasive?
• Which of the following is NOT one of the five key ethical principles?
• Which principle emphasizes the importance of maintaining professional competence and due care?
• To whom should the auditor report suspicion of fraud if management is suspected?
• What should occur after 7 years for other partners/senior staff on a listed client?
• Which of the following represents a consequence of financial statements prepared on a break-up basis?
• Which of the following is a performance ratio?
• How do assurance reports typically serve compared to statutory audits?
• What is required of the assurance provider to assess in review engagements?
• When might an auditor continue for two years after a partner leaves for a client?
• What is the duration calculation for the inventory holding period?
• If a partner joins a client as director or in key management, what is the restriction on reappointment?
• Which attribute of effective communication refers to meeting agreed time frames?
• What does ISA 330 advise regarding audit procedures?
• What should documentation of the audit process allow for?
• What does the gearing ratio measure?
• What is a current issue related to professional auditing practices?
• What is a condition under which the rotation period for a partner on a listed client can be extended?
• How is inherent risk defined in the context of auditing?
• What action should an auditor take upon identifying a misstatement?
• Which of the following is NOT a threat arising from long association with engagements?
• What is one of the thresholds used to calculate materiality for profit before tax (PBT)?
• Why are related party transactions considered high risk?
• What is an appropriate procedure when testing intangibles for amortization?
• What is one goal of tests of controls?
• What is typically included in a statutory audit report?
• What is a key characteristic of matters described in an other matter paragraph?
• Which method is NOT a way for firms to limit their liability for poor quality control?
• How can employee costs be effectively tested?
• Before relying on outsourced work, what must an auditor do first?
• What is the first step in justifying audit risks in key areas?
• How does the UK corporate governance code recommend assessing external auditors' effectiveness?
• Who is primarily responsible for monitoring audit quality?
• What are adjusting events according to ISA 560?
• Which of the following is a component of systems development and maintenance related to IT security?
• What is one action that should be avoided when dealing with suspected money laundering?
• What does an auditor consider when determining the impact of a misstatement on the audit opinion?
• How often should an engagement letter be reviewed or updated?
• According to ISA 240, what are the two types of misstatements arising from fraud?
• Which of the following is a reason data analysis can improve audit quality?
• What is the primary purpose of an engagement quality control review?
• Why is it important to establish informed management when providing non-audit services?
• What is the equation for calculating audit risk?
• Which of the following is a benefit of audits for small owner-managed businesses?
• How can loans be tested for their validity?
• What must be disclosed in financial statements regarding related party transactions?
• According to the FRC ethical standards, what is a main requirement for firms?
• What is the formula for interest cover?
• Which of the following reflects a misunderstanding regarding the auditor's role in fraud detection?
• Which is a ratio measuring short-term liquidity?
• Which of the following is NOT a governing factor of all assurance engagements?
• What does the 'third party test' in auditing refer to?
• How must an auditor and client agree to set a liability cap?
• What must an audit firm consider when analyzing risk before accepting an engagement?
• Which approach should organizations take when creating bribery prevention policies?
• What should be done if directors ignore requests for amendment by the auditor?
• What is the policy regarding staff compensation related to cross-selling the firm's products?
• What does ISQC 1 focus on?
• In auditing Going Concern, what type of analysis is useful for assessing key components?
• What information is critical to ensure the quality of results in data analytics?
• What must an audit firm do if management threats are identified in non-audit services?
• What type of attack is a denial of service attack?
• What is a potential problem related to data analytics in an audit practice?
• What assurance type and level is provided during reviews of financial information?
• According to ISA 550, what is considered a related party?
• What must be considered alongside ethical considerations when accepting a client?
• What is the key limitation on non-audit service fees for a listed client?
• What is one factor the ICAEW code of ethics states fees should be determined by?
• What is a strategy to address increased risk during an audit?
• According to ISA 200, what is one overall objective of an auditor?
• What is a primary responsibility of auditors in relation to fraud?
• Under what condition do non-audit services not require self-review safeguards?
• Which term refers to a digital set of records where individual items are linked together in a database?
• What is the guideline regarding accepting gifts from clients?
• What is the conclusion that an assurance provider must reach for review engagements?
• What should be emphasized when determining materiality thresholds?
• Upon discovering non-compliance with laws and regulations, what is the auditor required to do?
• If independence threats from non-audit services are insufficiently mitigated, what should the audit firm do?
• What action is taken if significant issues are identified during an engagement quality control review?
• What must be disclosed to the ethics partner if fees from a client exceed 10% but are below 15%?
• What is a key consideration when providing valuation services?
• What is one method to test Work in Progress (WIP)?
• What additional findings must be communicated for listed clients according to ISA 260?
• What defines a solvency ratio?
• What is a primary goal of professional standards in auditing?
• What is one method for testing trade payables?
• In ISA 600, what must be communicated about the component's financial information?
• What method is used to assess anomalies in employee costs?
• What is NOT a use of analytical procedures in auditing?
• What is a potential drawback of joint audits?
• If a regular audit fee for a non-listed client is expected to exceed 15% of the firm's fee income, what must be done?
• Which of the following is NOT a responsibility of a director as outlined by CA06?
• What is one procedure to test provisions?
• How is money laundering defined?
• What is management's responsibility regarding fraud?
• Which of the following could be a flexible procedure applied to financial statement line items?
• What does RPA stand for in the context of audit and technology?
• What does an other matter paragraph communicate?
• Which of the following is an example of a situation where an emphasis of matter paragraph may be used?
• Which is a way to monitor compliance with legal requirements in IT security?
• What defines the operating margin?
• What must individuals do concerning personal data under the General Data Protection Regulation (GDPR)?
• What is the role of training in auditing objectivity?
• Under what conditions is it acceptable to loan staff to a client?
• Which of the following defines a PIE client in financial auditing?
• Which sources are used for the risk assessment according to ISAs 315/300?
• What does control risk represent in an audit?
• What does a self-review threat in audit services indicate?
• Which of the following is NOT a matter the auditor is required to report on by exception?
• Which of the following is an example of business risk related to climate change?
• What is one limitation of preliminary analytical procedures?
• In the context of monitoring, what does "cold review" refer to?
• Which of the following common risks can impact revenue recognition?
• What procedure should be performed as part of review engagements?
• ISA 540 requires auditors to handle misstatements by?
• Which of the following indicates a potential conflict of interest in an audit?
• What is one of the primary uses of data analytics in auditing?
• Which of the following is an example of money laundering?
• What type of opinion is issued when there has been an inability to obtain sufficient appropriate audit evidence over a material and pervasive matter?
• Which of the following is a consequence of accepting non-audit services without proper safeguards?
• What is the first step required by ISA 540 when responding to estimates?
• What two levels of assurance can be provided for greenhouse gas emissions statements according to ISAE 3410?
• According to ISAE 3410, what is the level of assurance provided on greenhouse gas statements?
• In risk assessment, which factor is deemed necessary when suggesting possible audit evidence gathering challenges?
• What improvement can improve auditor and management relations?
• Which of the following actions helps the auditor assess the effectiveness of bribery prevention policies?
• In the resignation process of an auditor, what must be submitted to the registered office?
• What should a partner do if offered a role with a client company?
• What should auditors consider regarding opening balances in new audits?
• What is one safeguard for managing non-audit work?
• Which is a critical factor in understanding business risk as defined by ISA 315?
• What does the duty of confidentiality require of auditors?
• What is a specific threat when offering tax services?
• How is the trade payables payment period calculated?
• What is defined as detection risk in an audit setting?
• What is one of the six general threats to objectivity/independence according to IESBA?
• Which of the following is NOT a key indicator for fraud as set out by ISA 240?
• What is one of the limited procedures that can be performed in a review engagement?
• What is one of the auditor's responsibilities according to CA06?
• Which levels of assurance and opinion are provided for audits of financial statements?
• What is one benefit of planning an audit as identified in ISA 300?
• What is the primary responsibility of an assurance provider regarding financial forecasts?
• When is a modified report with an unmodified opinion typically issued?
• What is a potential safeguard against the objectivity issues caused by low-balling?
• Who is primarily responsible for reporting money laundering activities within a firm?
• What should auditors consider when responding to assessed levels of fraud risk?
• What compliance procedure should an auditor perform regarding laws impacting financial statements?
• In auditing PPE, which procedure is essential?
• What is one benefit of assurance in relation to information credibility?
• What would an auditor likely do if they find a misstatement during an audit?
• Which procedure is a standard part of a statutory audit?
• What is a benefit of conducting joint audits?
• In terms of report circulation, how do statutory audits differ from other assurance engagements?
• What is a key right of an outgoing auditor upon resignation?
• What is the definition of assurance in an audit context?
• How is material and pervasive matter defined?
• Which transaction is considered material by nature?
• What is a key aspect of effective communication expected from auditors to management?
• Which considerations must be communicated to a partner before accepting non-audit services?
• How can trade receivables be effectively tested?
• What should be analyzed to assess the risk of management overriding controls?
• How many main components are there in an unmodified auditor's report?
• Which of the following is a criticism the FRC had towards auditors regarding professional scepticism?
• What is one reason a firm might use to justify being chosen for an audit?
• What is one of the audit procedures to detect fraud?
• What should the auditor initially obtain to understand the legal framework surrounding their client?
• What is one of the anticipated impacts of the replacement of the FRC with the ARGA?
• If financial statements are materially misstated and the misstatement is both material and pervasive, what type of opinion should be issued?
• What mainly determines the scope of a statutory audit?
• What are the three adjustments an auditor should make to respond to risks at the assertion level?
• According to ISQC1/ISA 220, which element is responsible for ensuring that appropriate staff are allocated to engagements?
• What should the auditor do to assess reliance on a system of internal control?
• How might going concern risks be evaluated in an audit?
• What is one significant non-ICAEW consequence of poor quality control?
• Which of the following procedures is important for assurance on financial forecasts?
• Which element should be included when outlining audit procedures to address identified risks?
• What is required in the communication of key audit matters (KAMs)?
• What is the first step in the analytical procedures process?
• What is a required action for the auditor concerning misstatements?
• Which of the following is a significant factor to assess while testing revenue recognition?
• What does "low-balling" refer to in the context of auditing?
• According to ISA 570, what must an auditor assess regarding going concern?
• What is a key consideration if a member of the engagement team leaves to join the client?
• How can management’s basis for estimates regarding loans be tested?
• What is one of the main functions of the FRC in promoting audit quality?
• How should an ethical dilemma be approached?
• What is one duty of the outgoing auditor when removed under the Companies Act 2006?
• What is a significant benefit of quality control procedures for audit firms?
• What is a general assessment the auditor must conduct regarding systems of internal controls?
• At each stage of the audit, what must the auditor obtain regarding the going concern assumption?
• What is a safeguard against management threat in an auditing context?
• What should an auditor do if litigation between the firm and client is imminent?
• Which method can be used to test the capitalization of development costs?
• Which of the following recommendations did the CMA propose in their review?
• Which approach can be applied when testing high-risk revenue transactions?
• Which of the following is required in writing according to ISA 210?
• What must the component auditor confirm to the group auditor under ISA 600?
• What is one expectation gap related to fraud that relates to auditor responsibilities?
• What role does exercise professional scepticism play in auditing?
• Which action assesses the reasonableness of provisions?
• What is the primary purpose of walkthroughs in an audit?
• What does estimation uncertainty refer to in an audit context?
• What is an example of a special consideration for auditors based on ISA 315?
• What is a limitation of analytical procedures?
• What must be communicated to governance if non-audit services are provided?
• What restriction exists regarding recruitment and remuneration services?
• Which of the following is a primary responsibility of management regarding compliance with laws and regulations?
• Which of the following is NOT a matter that ISA 600 specifies should be communicated from the group audit team to the component audit team?
• Which element does not fall under the quality control elements required by ISQC1/ISA 220?
• What responsibility does CA06 assign to management that cannot be performed by auditors?
• Which action helps increase objectivity and independence in auditing?
• What action should be taken if a partner has served on a non-listed client engagement for longer than 10 years?
• According to ISA 260, which of the following is NOT a matter to be communicated within the audit report?
• What must auditors consider regarding sustainability impacts in their reports?
• Which of the following is a characteristic of materiality?
• Which of the following is an ongoing concern addressed by the monitoring process?
• Which procedure can be used to test the accuracy of inventory?
• What is one of the implications if the auditor has not received sufficient returns from unvisited branches?
• What common benefit do audits provide to third parties like banks or tax authorities?
• What should organizations emphasize in their culture to prevent bribery?
• Which example is associated with management override of controls?
• What is one of the monitoring and review measures organizations should implement for bribery prevention?
• Under the GDPR Act, what is a requirement for individuals processing personal data?
• According to rules, when should partners rotate on listed client engagements?
• What is a consequence of poor quality control according to ICAEW?
• What are non-adjusting events as per ISA 560?
• What threats arise from the provision of IT services?
• When issuing a modified report, which is NOT one of the types of reports an auditor can issue?
• Who is the primary recipient of a statutory audit report?
• In the context of CPA and auditing, what does independence mean?
• What must be considered before using the results of an internal audit for reliance?
• In what situation is an auditor permitted to disclose information to third parties?
• Which of the following is NOT a consideration before accepting an audit?
• What is the rule regarding audit fees for listed clients?
• What does ISA 610 require from auditors regarding internal audits?
• In audit completion, what is the purpose of using analytical procedures?
• What must management provide in relation to the audit engagement letter?
• What is a common test for management override of controls in an audit?
• Which of the following is considered a significant risk per ISA 315?
• What constitutes audit failure?
• What is the key aspect of corroboration in analytical procedures?
• Which is a common criticism of external auditors?
• Who is considered to be part of 'those charged with governance'?
• Which is one of the steps in the standard-setting process for the IAASB?
• What is one of the data analytics routines that can be executed during an audit?
• What does harmonisation in auditing aim to achieve?
• If a listed client partner rotates, what must be avoided?
• Which group has the responsibility to report non-compliance to external regulators if required?
• What ethical consideration must be documented when accepting non-audit services?
• What does ISA 330 recommend to manage risks identified in financial statements?