ACCA Strategic Professional

Question 1

During the audit of a listed company, the audit team discovers that management has recorded a material transaction with a related party at an amount significantly above market value. Under ISA 550, the auditor should FIRST:

Immediately report the matter to the regulatory authorities Evaluate whether the transaction has been properly disclosed and consider the implications for the risk of material misstatement Resign from the engagement as management lacks integrity Issue a qualified audit opinion without further investigation

Correct Answer:

Evaluate whether the transaction has been properly disclosed and consider the implications for the risk of material misstatement

Question 2

An auditor is assessing going concern for a manufacturing company. Which of the following indicators would present the MOST significant doubt about going concern?

The company's revenue has declined by 5% compared to the prior year The company's bank has withdrawn its overdraft facility and a major loan covenant has been breached with no waiver obtained Employee turnover has increased by 15% during the year The company has changed its accounting policy for depreciation

Correct Answer:

The company's bank has withdrawn its overdraft facility and a major loan covenant has been breached with no waiver obtained

Question 3

Under ISA 240 The Auditor's Responsibilities Relating to Fraud, there is a presumption that revenue recognition involves a risk of fraud. In which situation is the auditor PERMITTED to rebut this presumption?

When the company has strong internal controls over revenue When the revenue streams are simple and predictable, and the auditor has documented the basis for rebuttal When management asserts that no fraud has occurred The presumption can never be rebutted under any circumstances

Correct Answer:

When the revenue streams are simple and predictable, and the auditor has documented the basis for rebuttal

Question 4

An audit firm has been engaged to audit Company X. The audit engagement partner's spouse owns 2% of Company X's shares. Under IESBA Code of Ethics, this represents:

An acceptable situation provided it is disclosed to those charged with governance A self-interest threat that can be reduced to an acceptable level through safeguards A breach of independence requirements that cannot be mitigated — the partner must be replaced An advocacy threat that requires a second partner review

Correct Answer:

A breach of independence requirements that cannot be mitigated — the partner must be replaced

Question 5

The auditor of a group is planning the group audit. Under ISA 600 (Revised), which of the following is the group auditor's responsibility regarding component auditors?

The group auditor has no responsibility for work performed by component auditors The group auditor must re-perform all audit procedures carried out by component auditors The group auditor must evaluate the competence and independence of component auditors and issue appropriate instructions The group auditor can delegate full responsibility to component auditors for significant components

Correct Answer:

The group auditor must evaluate the competence and independence of component auditors and issue appropriate instructions

Question 1

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About this Exam

Prepare with the ACCA Strategic Professional practice quiz. This question bank includes 30 questions covering auditor, audit, company, value, and going. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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ACCA Strategic Professional

This practice set contains 30 questions from the matching question bank and focuses on auditor, audit, company, value, and going. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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ACCA Strategic Professional

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