Question 1:

01. Which audit opinion (audit report) would be the most appropriate in the following case?

You are auditing ABC Co. for the first time. ABC Co. has been in business for several years but has never had an audit before. The company has decided to convert to IFRS standards from its ASPE prepared financial statements since it decided to go public next year. After the audit is completed, you conclude that the current year balance sheet is stated correctly in accordance with IFRS. The client did not authorize you to do test work for any of the previous years.

Question 01 options:

Modified/Qualified

Disclaimer of opinion

Unmodified/Unqualified

Adverse

Question 2:

Indicate whether each of the following procedures are a test of controls (TC), analytical procedure (AP) or a test of details of balances (TDB). Select the correct sequence from a to d.

a. ___ Examine vendor's invoices to verify the ending balance in accounts payable.

b. ___ Examine the treasurer's initials on monthly bank reconciliations as an indication of whether they have been reviewed.

c. ___ Multiply the commission rate by total sales, and compare the result with commission expense.

d. ___ Confirm accounts receivable balances directly with customers.

Question 02 options:

AP, TDB, TC, TC

TC, TDB, AP, TDB

TDB, TC, AP, TDB

TC, TC, AP, TDB

Question 3:

ABC Company manufactures and sells laptops to retailers (i.e. Best Buy). Every sale must be recorded on a numerically sequenced shipping advice (bill of lading), which initiates the sales invoice to the retailer. Every duplicate sales invoice (the seller's copy) is also numerically sequenced and must have the "bill of lading" attached to it, as proof of the sale and shipment of the product to the retailer.

During the testing of the transaction-related audit objectives;

If the auditor is testing for any break in the sequence (missing numbers) in either the invoices or shipping advice, which transaction-related audit objective is being tested?

Question 03 options:

Cutoff

Existence

Occurrence

Completeness