Exam (elaborations)
AUE2601 ASSIGNMENT 3 2024
- Institution
- University Of South Africa (Unisa)
AUE2601 ASSIGNMENT 3 2024
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1. UNISA2. 2024
3. AUE2601-24-S1
4. Welcome Message
5. Assessment 3
Assessment 3
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Your final grade for this quiz is 30.00/30.00
Attempts allowed: 2
This quiz opened at Monday, 6 May 2024, 8:00 AM
This quiz will close on Tuesday, 7 May 2024, 11:00 PM.
Question 1
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Which of the following statements is incorrect regarding misstatements?
a. If the directors refuse to adjust the financial statements for a material factual misstatement identified by the auditor, the auditor
will have to issue a modified audit report
b. A misstatement is a difference between what has been reported by the directors in the financial statements, and what
should have been reported in terms of the reporting framework
c. Misstatements that are clearly trivial may be ignored by the auditor
d. The three types of misstatements an auditor can identify are factual misstatements, judgmental misstatements and trivial
misstatements
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Dashboard / My courses / AUE2601-24-S1 / Welcome Message / Assessment 3
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Even though management may put controls in place at a business, these controls and policies sometimes do not provide absolute
assurance that the risks that threaten the objectives of the business will be adequately responded to due to the following reasons:
1. Management’s usual requirement is that the cost of internal control exceeds the expected benefit to be derived (cost/benefit).
2. Judgement errors on the nature and extent of the controls implemented and the risk assumed.
3. The tendency for internal controls to be directed at non-routine transactions rather than routine transactions.
4. The potential for human error due to carelessness, distraction, mistakes of judgement and the misunderstanding of instructions.
5. The possibility of circumvention of internal controls through the collusion of a member of management, or an employee, with
parties outside or inside the company.
Which option correctly indicates the limitations of internal controls?
a.
1, 2, 3, 4 and 5
b. 1 and 5
c.
1, 3 and 4
d. 1, 3 and 4
Clear my choice
, Question 3
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Dashboard Calendar
Which option describes a test of control performed by the auditor?
Dashboard / My courses / AUE2601-24-S1 / Welcome Message / Assessment 3
a. The auditor agrees the amount of revenue per the sales invoice to the entry in the accounting records
b. The auditor counts the number of a stock item in the warehouse and traces the number to the stock listing
c. The auditor sends an external confirmation request to a debtor to confirm the amount owed to the entity
d. The auditor inspects how the accounting manager reviews the bank reconciliation, agrees the amounts to the external bank
statements and verifies the supporting documentation for the reconciling items included in the reconciliation before signing
the reconciliation as proof of the review
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Dashboard / My courses / AUE2601-24-S1 / Welcome Message / Assessment 3
Question 11
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When designing and performing audit procedures, the auditor shall consider the relevance of the information to be used as audit
evidence.
Which one of the options describes evidence gathered by the auditor which will be relevant for the existence assertion relating to
inventory?
1. The auditor selects a sample of inventory items from the inventory records to count and inspect at the annual inventory
count.
2. The auditor recalculates the value of inventory on hand and compares it to the value per the stock listing.
3. The auditor obtains confirmation about the consignment inventory held at a third party.
4. The auditor selects inventory items from the floor and traces these back to the stock listing.
a. 1, 2 and 4
b.
1 and 3
c. 2 and 4
d.
1, 3 and 4
Clear my choice
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