Accounting Multiple Choice Question – 6 September 2025

With respect to ISA 315 (UK), Identifying and Assessing the Risks of Material Misstatement Through Understanding of the Entity and Its Environment, which ONE of the following procedures will NOT be used in understanding the entity and its environment?

Select ONE answer:

1. Inquiries of management and others within the entity
2. Inquiries of third parties
3. Analytical procedures
4. Observation and inspection

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 standard states that inquiries of third parties may be carried out if useful, but lists options 1, 3 and 4 as procedures that SHALL be carried out.
3. Not correct
4. Not correct

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