For companies required to produce interim financial statements (IFI):

A. One audit firm should audit the ifi and a different firm should audit the financial statements for the year as a whole.
B. One accountancy firm should review the ifi and a different firm should audit the financial statements for the year as a whole.
C. The same firm should audit the ifi and the financial statements for the year as a whole.
D. The same firm should review the ifi and the financial statements for the year as a whole.

What sort of assurance is provided in a review engagement?

A. Positive assurance
B. Negative assurance
C. High level of assurance
D. No assurance

Which one of the following is part of the auditor’s function?

A. Conducting the inventory count
B. Obtaining and evaluating audit evidence on the financial statements
C. Calculating the year-end accruals figure for inclusion in the accounts
D. Providing representations to management

Which of the following does NOT belong in the auditors’ report?

A. Introductory paragraph specifying the pages to which the report relates and the accounting convention adopted
B. Basis of the opinion
C. Involvement of any specialist
D. Statement of responsibilities of directors and auditors

What is meant by the expression ‘expectation gap’?

A. The gap between how the directors of a company perform their duties and how the shareholders expect them to perform
B. The gap between how the directors of a company perform their duties and how the general public expects them to perform
C. The gap between the public perception of the role of company auditors and their statutory role and responsibilities
D. The gap between the auditors’ own perception of their duties and how they are set out in the companies act

Which of the following would you not use as a benchmark for comparison when undertaking analytical procedures?

A. Other audit clients
B. Previous years
C. Other companies in the same industry
D. Budget

Which of the following is true about written representations?

A. They are the best source of audit evidence
B. They should be used only when there is a lack of other substantive audit evidence
C. They should be used only when there is other substantive audit evidence to complement it
D. Shareholders receive a copy of all material written representations

Which of the following are fundamental ethical principles for professional accountants? 1 Competence 2 Compliance 3 Integrity 4 Objectivity

A. 1, 2 and 3 only
B. 1, 3 and 4 only
C. 2, 3 and 4 only
D. 1, 2 and 4 only

An auditor should not accept a loan on favourable commercial terms from an audit client because of the threat to his or her independence. The threat would be a___________?

A. Self-interest threat
B. Self-review threat
C. Advocacy threat
D. Familiarity threat

Which one of the following may auditors NOT perform for their client?

A. Taking management decisions
B. Preparation of accounting records
C. Preparing tax computations
D. Advising on weaknesses in the internal control systems