Exam (elaborations)
AUE2601 ASSIGNMENT 6
- Institution
- University Of South Africa (Unisa)
AUE2601 ASSIGNMENT 6
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AUE2601-S2-22-ASSESSMENT-6Started on Wednesday, 13 July 2022,
State Finished
Completed on Wednesday, 13 July 2022,
Time taken 1 hour 40 mins
Grade 44.00 out of 60.00 (73%)
Question 1
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Question text
The following statements were presented to you regarding review engagements:
1 With a review engagement, the fundamental ethical principles are not applicable to the
practitioner as with an audit.
2 A practitioner should display professional scepticism throughout a review engagement.
3 The engagement partner remains responsible for the implementation of the firm’s quality
control procedures at the engagement level.
Choose one option below that indicates the correct statement(s) in terms of International
Standards on Review Engagements.
Select one:
a.
Only 1 and 3.
b.
Only 2 and 3.
c.
Only 2.
d.
1, 2 and 3.
Question 2
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, AUE2601-S2-22-ASSESSMENT-6
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Which one of the following people can be appointed as auditor of Diva (Pty) Ltd (“Diva”) for
the financial year ended 31 May 2020 in accordance with the Companies Act?
Select one:
a.
Mr Naidoo, a chartered accountant who resigned as director of Diva on 16 June 2019.
b.
Miss Olive, who is the bookkeeper of Diva since January 2015. She is a chartered accountant
and registered auditor, and runs her own firm called Olive Accounts Inc.
c.
Mr Darwin, a director of an audit firm called HIG Auditors Inc. HIG Auditors was the
appointed auditor of Diva more than six years ago. Since then HIG Auditors has only
performed ad hoc secretarial work for the company.
d.
Mrs Klein, a highly respected auditor, who has never worked at or done any work for Diva.
Mrs Klein’s husband has been the company secretary of Diva for the last four years.
Question 3
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Assertions are defined in the International Standards on Auditing (ISAs) as representations
of management, explicit or otherwise, that are embodied in the financial statements.
Assertions are used by the auditor to consider the different types of potential misstatements
that may occur.
Which one of the following procedures will provide the best audit evidence relating to the
completeness assertion?
, AUE2601-S2-22-ASSESSMENT-6
Select one:
a.
A sample of motor vehicles was selected from the fixed asset register and physically verified.
b.
A sample of inventory items was selected from the floor and traced to the general ledger.
c.
The bank balances at year end were agreed to the external bank statements received from
VVN Bank where the client has its cheque and investment accounts.
d.
A sample of debtors was selected from the debtors’ listing and confirmation letters were
sent to the debtors.
Question 4
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Which one of the following statements is true?
Select one:
a.
When the audit partner of a firm is the best friend of the CEO of an audit client and if they
have been best friends for more than 20 years, this indicates the existence of a self-interest
and a familiarity threat.
b.
When a member of an audit team or a partner in the audit firm leaves the firm to take up a
position as a director of the audit client, this indicates the existence of a familiarity threat.
c.
When an audit partner is seconded by the firm to an audit client where the audit partner will
act as the chief financial officer, this indicates the existence of a self-interest threat.
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