Exam (elaborations)
ACA Assurance(questions with verified answers)
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ACA Assurance(questions with verified answers)
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ACA Assurance5 key elements of audit - correct answer ✔✔1. 3 party involvement
2. subject matter (f/s)
3. suitable criteria (e.g. UK CGC)
4. evidence
5. written report
ISA 200 - what are the objectives of auditors? - correct answer ✔✔- obtain reasonable assurance f/s are
free from material misstatement (fraud or error)
- express opinion whether f/s prepared in accordance w/ financial reporting framework
Exemption from statutory audit - correct answer ✔✔- CA 2006 exempts small p. ltd. if 2/3:
-> 50 employees or less
-> turnover £10.2m or less
-> gross assets £5.1m or less
Auditor requirements - correct answer ✔✔basic:
- employment by firm controlled by qualified persons
- CA2006 no officers/employees of company or partner of above
qualified auditors:
- membership of recognised supervisory body
Money laundering check (client due diligence) - correct answer ✔✔- req. per. Money Laundering
Regulations 2007
- client id docs retained 5 yrs
, ISA 210: mandatory contents of engagement letter (6) - correct answer ✔✔- auditor's and
management's responsibilities
- scope of work (stat/non-stat)
- form of reports (reasonable/limited)
- written confirmation of firm's acceptance of engagement
- level of access to books & records (full = audit & limited = review engagement)
- reporting framework
ISA 210: optional contents of engagement letter (5) - correct answer ✔✔- limitations of engagement
- confidentiality/restricted use of report
- reliance on internal controls
- basis of fee calculations
- restrictions on auditor's liability
Key components of audit strategy - correct answer ✔✔- understanding the entity and its environment
- materiality
- risk assessment
- nature, extent & timing of audit procedures
- direction, supervision & review of work
ISA 315 - what 6 things are important in understanding the entity and its environment? - correct answer
✔✔- industry, regulatory, financial reporting framework
- nature of the entity
- accounting policies
- objectives and strategies & business risks that may result in material misstatement
- measurement of entity's financial performance
- internal controls
ISA 315 - How to understand the entity and its environment? (4) - correct answer ✔✔- enquires of
management & client staff
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