The Multiple Choice Questions Blog

According to ISA 580, which ONE of the following MUST auditors obtain written representations about?

Select ONE answer:

1. Material matters where other evidence cannot reasonably be expected to exist
2. Management’s belief that it has fulfilled its responsibility for the preparation of the financial statements
3. That the financial statements record and reflect all transactions relating to stationery expenditure
4. Material matters where other evidence is missing due to an emergency, such as a fire

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – Auditors may only obtain written representations to support other audit evidence. Where evidence is missing due to a fire, this is not a matter to obtain a written representation on but is an inability to obtain sufficient appropriate audit evidence.
3. Not correct
4. Not correct

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According to ISA (UK) 580, Written Representations, which ONE of the following is an auditor NOT required to confirm in writing with management?

Select ONE answer:

1. Management’s agreement of the level of materiality used during the audit
2. Management’s belief that it has fulfilled its responsibility for the preparation of financial statements
3. All transactions have been reflected in the financial statements
4. The fact that management has provided the auditor with all relevant information

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – the level of materiality used during the audit is the responsibility of the auditors.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

For the following statement regarding audit data analytics, select whether it is of no relevance, depends on the type of business, or is true or false.

• Data analytics allows auditors to test large quantities of transactions very quickly.

Select ONE answer:

1. No relevance
2. False
3. Depends on the type of business
4. True

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – Data analytics makes it possible not just to test large quantities of transactions very quickly, but also to test whole populations of transactions and so, potentiality and in the future, to revolutionise the whole basis of auditing!

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For the following statement regarding audit data analytics, select whether it is of no relevance, depends on the type of business, or is true or false.

• Significant time must always be spent tailoring data analytics procedures to the individual audit client to achieve good results.

Select ONE answer:

1. True
2. No relevance
3. False
4. Depends on the type of business

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – Data analytics is not about spending time tailoring the procedures to the client. A major advantage of data analytics is that they are standardised.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

For the following statement regarding audit data analytics, select whether it is of no relevance, depends on the type of business, or is true or false.

• Data analytics allows auditors to investigate complex data using simple visualisation techniques.

Select ONE answer:

1. False
2. True
3. No relevance
4. Depends on the type of business

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – A key element of data analytics is the ability to process very large and complex data into simple visual representations, which can help auditors to spot trends they might otherwise have missed.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.