Audit and Assurance (AA) – ACCA Exam
updated questions and CORRECT answers
Fundamental Principles of IFAC code of ethics - CORRECT ANSWER Objectivity,
Professional Behavior, Professional Competence and due care, Integrity, Confidentiality
Threats to Objectivity - CORRECT ANSWER Familiarity, Self-review, Self-interest,
Intimidation, Advocacy
Examples of Self-interest Threats - CORRECT ANSWER Fee intimidation, gifts and
hospitality, owning shares/financial interests, loans and guarantees, business relationships,
potential employment with an audit client
Examples of Familiarity Threats - CORRECT ANSWER Long association of senior
personnel, family and personal relationships, self-review threats
Examples of Advocacy Threats - CORRECT ANSWER Representing the client in
court, negotiating on the client's behalf for finance, loan of personnel from audit firm to client
Examples of Intimidation Threats - CORRECT ANSWER Fee dependency,
gifts/hospitality, family relationships (double check this one)
Corporate Governance - CORRECT ANSWER means by which a company is
operated/controlled, aimed at ensuring company is run in the best interest of all stakeholders
Advantages of Good Corporate Governance - CORRECT ANSWER Transparency,
accountability, efficiency, flexibility, less likely to be mismanaged (avoid fraud)
Two Main Ways Management Betray Stakeholders - CORRECT ANSWER Direct
extraction (bonuses, excessive salary increase), manipulation of share price
updated questions and CORRECT answers
Fundamental Principles of IFAC code of ethics - CORRECT ANSWER Objectivity,
Professional Behavior, Professional Competence and due care, Integrity, Confidentiality
Threats to Objectivity - CORRECT ANSWER Familiarity, Self-review, Self-interest,
Intimidation, Advocacy
Examples of Self-interest Threats - CORRECT ANSWER Fee intimidation, gifts and
hospitality, owning shares/financial interests, loans and guarantees, business relationships,
potential employment with an audit client
Examples of Familiarity Threats - CORRECT ANSWER Long association of senior
personnel, family and personal relationships, self-review threats
Examples of Advocacy Threats - CORRECT ANSWER Representing the client in
court, negotiating on the client's behalf for finance, loan of personnel from audit firm to client
Examples of Intimidation Threats - CORRECT ANSWER Fee dependency,
gifts/hospitality, family relationships (double check this one)
Corporate Governance - CORRECT ANSWER means by which a company is
operated/controlled, aimed at ensuring company is run in the best interest of all stakeholders
Advantages of Good Corporate Governance - CORRECT ANSWER Transparency,
accountability, efficiency, flexibility, less likely to be mismanaged (avoid fraud)
Two Main Ways Management Betray Stakeholders - CORRECT ANSWER Direct
extraction (bonuses, excessive salary increase), manipulation of share price
