Tag: Topic 18

Which ONE of the following statements is invalid?

Select ONE answer:

1. Positive (reasonable) assurance will be given on a statutory audit assignment
2. Positive (reasonable) assurance will be given on a review assignment
3. Positive (reasonable) assurance requires more rigorous work to be undertaken than negative assurance does
4. Negative assurance is assurance given in the absence of any indications to the contrary

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 =>   is incorrect as positive (or reasonable) assurance will be given on an audit assignment, whereas negative (or limited) assurance is given on a review assignment, reflecting the limited procedures carried out.
3. Not correct
4. Not correct

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

Which ONE of the following is not an assertion used by the auditor about different classes of transactions?

Select ONE answer:

1. Rights and Obligations
2. Occurrence
3. Completeness
4. Cut-off

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 => Rights and Obligations would be used in respect of a balance, not a class of transactions.
2. Not correct
3. Not correct
4. Not correct

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

Which ONE of the following is not an assertion used by the auditor about different classes of transactions?

Select ONE answer:

1. Occurrence
2. Completeness
3. Cut-off
4. Existence

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 => existence would be used in respect of a balance, not a class of transactions.

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

Which ONE of the following is a valid comment about the quality of assurance evidence?

Select ONE answer:

1. Evidence from internal sources is more reliable than evidence created by the assurance provider
2. Evidence from internal sources is less reliable when related internal controls operate effectively
3. Evidence from external sources is more reliable than evidence obtained from the entity’s records
4. Photocopies are more reliable than facsimiles

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 => Third-party confirmation of an accounting transaction, such as a bank statement, is always something that is sought during the audit process, i.e. a bank reconciliation.
4. Not correct

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

Which ONE of the following is a valid comment about the quality of assurance evidence?

Select ONE answer:

1. Evidence from internal sources is more reliable than evidence created by the assurance provider
2. Evidence from internal sources is more reliable when related internal controls operate effectively
3. Evidence from external sources is less reliable than evidence obtained from the entity’s records
4. Photocopies are more reliable than facsimiles

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 => If internal controls are not operating effectively, then evidence from reliable sources is not to be relied upon.
3. Not correct
4. Not correct

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