The Multiple Choice Questions Blog

For the following statement concerning written representations letters, select whether it is of no relevance, depends on the type of business, true or false.

• A written representation letter is only required for new clients.

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 2

1. Not correct
2. Correct – Written representation letters are required on an annual basis so that representations are valid for each specific audit.
3. Not correct
4. Not correct

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On which ONE of the following matters should an auditor seek a written representation?

Select ONE answer:

1. Whether there are plans to abandon product lines that will result in obsolete inventory
2. Whether plant and equipment held on the client’s premises exists
3. The existence (or not) of reconciling items between the cash balance and the bank statement balance
4. Whether there are any subsequent events after the year-end regarding the popularity of the new canteen menu

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 – Auditors may ONLY obtain written representations to support other audit evidence (ISA 580)
2. Not correct
3. Not correct
4. Not correct

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

On which ONE of the following matters should an auditor seek a written representation?

Select ONE answer:

1. Whether there are plans to abandon free coffee refills in the canteen
2. Whether plant and equipment held on the client’s premises exists
3. The existence (or non-existence) of reconciling items between the cash balance and the bank statement balance
4. Whether there are any undisclosed subsequent events

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 – The auditor should be able to obtain sufficient alternative evidence regarding the existence of plant and equipment and reconciling items on the cash account.

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

Written representations may be sought as audit evidence.

Which ONE of the following is a valid circumstance in which written representations may be required?

Select ONE answer:

1. Where information which would normally be expected to be available is unavailable
2. To support other evidence about the suitability of a particular social media policy
3. To support the inspection of a minute introducing the directors’ intention to sell a material investment
4. When the alternative audit procedure would be too time consuming

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 -The other two options would not be valid circumstances in which to seek written representations. If information that would normally be expected to be available is unavailable, this indicates an inability to obtain sufficient appropriate audit evidence. The fact that an alternative audit procedure is time-consuming is not a valid reason to seek a written representation; a written representation cannot substitute for other evidence that is expected to exist.
4. Not correct

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

Written representations may be sought as audit evidence.

Which ONE of the following is a valid circumstance in which written representations may be required?

Select ONE answer:

1. Where information which would normally be expected to be available is unavailable
2. To support other evidence about the suitability of accounting policies
3. To support the inspection, the staff suggestion committee minutes
4. When the alternative audit procedure would be too time-consuming

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 – The other two options would not be valid circumstances in which to seek written representations. If information that would normally be expected to be available is unavailable, this indicates an inability to obtain sufficient appropriate audit evidence. The fact that an alternative audit procedure is time-consuming is not a valid reason to seek a written representation; a written representation cannot substitute for other evidence that is expected to exist.
3. Not correct
4. Not correct

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