Assessing the risk of material misstatement

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. Which of the following is NOT one of the five components of internal control?

  2. The key members of the engagement team should discuss the risk of material misstatement. This discussion should place emphasis on which of the following?

  3. Which of the following is NOT a risk of material misstatement?

  4. Which of the following is NOT a required risk assessment procedure?

  5. Which of the following does NOT have to be documented?

  6. Which of the following should be considered in determining whether an identified risk of material misstatement is a significant risk? (i) The complexity of transactions (ii) The availability of audit evidence (iii) Whether the risk is a risk of fraud

  7. Which of the following are examples of judgmental misstatements? (i) Inadequate disclosure regarding going concern status (ii) The use of an inappropriate discount factor when discounting a liability to present value (iii) Failing to disclose additions to non-current assets

  8. When a risk is determined to be a significant risk, which of the following is a response required by ISA 315?

  9. Which of the following may be relevant in identifying risks of material misstatement? (i) Information obtained in the auditor's client acceptance or continuance process (ii) Information obtained in other engagements performed for the audited entity (iii) Information obtained from audit procedures performed in previous audits

  10. Which of the following is NOT included in ISA 315's list of aspects over which the auditor is required to obtain an understanding?