AA E Review and reporting

Written by Fahad Mirza (ACCA)

ACCA · Audit and Assurance · 10 questions

Name: ____________________ Date: ____________

What are subsequent events?
- A Future budgets
- B Events between the period end and the date of the auditor's report, and facts that become known later
- C Events planned by management
- D Events during the year
Which of these is an indicator of going concern problems?
- A Recurring losses and a net current liability position
- B Strong cash flow
- C Increasing orders
- D Low gearing
Going concern uncertainty is material and is adequately disclosed. What opinion is given?
- A An unmodified opinion with a section on material uncertainty
- B A disclaimer
- C An adverse opinion
- D A qualified opinion
Going concern uncertainty is material but the disclosure is inadequate. What is the result?
- A An unmodified opinion
- B No report
- C A qualified or adverse opinion
- D A disclaimer only
A misstatement is material but not pervasive. Which opinion is given?
- A A qualified opinion ('except for')
- B An unmodified opinion
- C An adverse opinion
- D A disclaimer
A misstatement is material and pervasive. Which opinion is given?
- A A disclaimer
- B A qualified opinion
- C An adverse opinion
- D An unmodified opinion
The auditor cannot obtain sufficient evidence and the possible effects are material and pervasive. What is the opinion?
- A An adverse opinion
- B A qualified opinion
- C An unmodified opinion
- D A disclaimer of opinion
What does an emphasis of matter paragraph do?
- A It replaces the opinion
- B It states the audit fee
- C It modifies the opinion
- D It draws attention to a matter that is properly presented but fundamental to understanding
What is the purpose of written representations?
- A To confirm management's responsibilities and support other evidence
- B To set the audit fee
- C To report to the tax authority
- D To replace audit evidence
Management refuses to provide written representations. What may the auditor do?
- A Modify the opinion or withdraw
- B Ignore it
- C Give an unmodified opinion
- D Prepare the representations themselves

Answer key

1. B, 2. A, 3. A, 4. C, 5. A, 6. C, 7. D, 8. D, 9. A, 10. A

They can be adjusting or non-adjusting.
Other indicators include loan repayments that cannot be met and loss of key customers.
The uncertainty is described in a separate section.
Inadequate disclosure is a material misstatement.
Qualified opinions apply to material but not pervasive matters.
The financial statements as a whole are misleading.
The auditor cannot give an opinion.
It does not modify the opinion.
They are not a substitute for other evidence.
Refusal can be a limit on scope.