ACA Assurance Exam UPDATED
ACTUAL QUESTIONS AND CORRECT
ANSWERS
5 key elements of audit - CORRECT ANSWER 1. 3 party involvement
2. Subject matter (f/s)
3. Suitable criteria (e.g. UK CGC)
4. Evidence
5. Written report
ISA 200 - what are the objectives of auditors? - CORRECT ANSWER - obtain reasonable
assurance f/s are free from material misstatement (fraud or error)
- express opinion whether f/s prepared in accordance w/ financial reporting framework
Exemption from statutory audit - CORRECT ANSWER - CA 2006 exempts small p. Ltd. If 2/3:
-> 50 employees or less
-> turnover £10.2m or less
-> gross assets £5.1m or less
Auditor requirements - CORRECT ANSWER basic:
- employment by firm controlled by qualified persons
- CA2006 no officers/employees of company or partner of above
Qualified auditors:
- membership of recognised supervisory body
Money laundering check (client due diligence) - CORRECT ANSWER - req. Per. Money
Laundering Regulations 2007
- client id docs retained 5 yrs
, ISA 210: mandatory contents of engagement letter (6) - CORRECT ANSWER - auditor's and
management's responsibilities
- scope of work (stat/non-stat)
- form of reports (reasonable/limited)
- written confirmation of firm's acceptance of engagement
- level of access to books & records (full = audit & limited = review engagement)
- reporting framework
ISA 210: optional contents of engagement letter (5) - CORRECT ANSWER - limitations of
engagement
- confidentiality/restricted use of report
- reliance on internal controls
- basis of fee calculations
- restrictions on auditor's liability
Key components of audit strategy - CORRECT ANSWER - understanding the entity and its
environment
- materiality
- risk assessment
- nature, extent & timing of audit procedures
- direction, supervision & review of work
ISA 315 - what 6 things are important in understanding the entity and its environment? - CORRECT
ANSWER - industry, regulatory, financial reporting framework
- nature of the entity
- accounting policies
- objectives and strategies & business risks that may result in material misstatement
- measurement of entity's financial performance
- internal controls
ISA 315 - How to understand the entity and its environment? (4) - CORRECT ANSWER -
enquires of management & client staff
ACTUAL QUESTIONS AND CORRECT
ANSWERS
5 key elements of audit - CORRECT ANSWER 1. 3 party involvement
2. Subject matter (f/s)
3. Suitable criteria (e.g. UK CGC)
4. Evidence
5. Written report
ISA 200 - what are the objectives of auditors? - CORRECT ANSWER - obtain reasonable
assurance f/s are free from material misstatement (fraud or error)
- express opinion whether f/s prepared in accordance w/ financial reporting framework
Exemption from statutory audit - CORRECT ANSWER - CA 2006 exempts small p. Ltd. If 2/3:
-> 50 employees or less
-> turnover £10.2m or less
-> gross assets £5.1m or less
Auditor requirements - CORRECT ANSWER basic:
- employment by firm controlled by qualified persons
- CA2006 no officers/employees of company or partner of above
Qualified auditors:
- membership of recognised supervisory body
Money laundering check (client due diligence) - CORRECT ANSWER - req. Per. Money
Laundering Regulations 2007
- client id docs retained 5 yrs
, ISA 210: mandatory contents of engagement letter (6) - CORRECT ANSWER - auditor's and
management's responsibilities
- scope of work (stat/non-stat)
- form of reports (reasonable/limited)
- written confirmation of firm's acceptance of engagement
- level of access to books & records (full = audit & limited = review engagement)
- reporting framework
ISA 210: optional contents of engagement letter (5) - CORRECT ANSWER - limitations of
engagement
- confidentiality/restricted use of report
- reliance on internal controls
- basis of fee calculations
- restrictions on auditor's liability
Key components of audit strategy - CORRECT ANSWER - understanding the entity and its
environment
- materiality
- risk assessment
- nature, extent & timing of audit procedures
- direction, supervision & review of work
ISA 315 - what 6 things are important in understanding the entity and its environment? - CORRECT
ANSWER - industry, regulatory, financial reporting framework
- nature of the entity
- accounting policies
- objectives and strategies & business risks that may result in material misstatement
- measurement of entity's financial performance
- internal controls
ISA 315 - How to understand the entity and its environment? (4) - CORRECT ANSWER -
enquires of management & client staff
