International Auditing (ISA) - Exam Practice (100
questions)
KU Leuven - International Auditing - 100 exam-style questions with model answers
Answers are shown in red beneath each question.
Multiple-choice questions are labelled A-D; some ask for the INCORRECT statement, some for the
CORRECT/best answer - read each stem carefully.
Cover the red answers and attempt each question first.
Part A — Multiple-choice questions (identify the requested statement)
1. [Multiple choice] According to ISA 200, which statement is INCORRECT?
A) The overall objective is to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error.
B) Reasonable assurance is a high level of assurance, but it is not absolute, and the auditor is not
expected to reduce audit risk to zero.
C) Because the auditor must obtain absolute assurance, the audit is designed so that no material
misstatement can ever go undetected.
D) Professional skepticism is an attitude that includes a questioning mind and a critical
assessment of audit evidence.
Answer: C. ISA 200 requires reasonable, not absolute, assurance; some audit risk always
remains. The other three statements correctly describe the objective and professional skepticism.
2. [Multiple choice] Which statement about sufficient appropriate audit evidence (ISA 200) is
INCORRECT?
A) Appropriateness is the measure of the quality of audit evidence, namely its relevance and its
reliability.
B) Sufficiency is the measure of the quantity of audit evidence, affected by the assessed risks and
the quality of the evidence.
C) The higher the assessed risk of material misstatement, the less audit evidence the auditor
needs to obtain.
D) Higher-quality evidence may reduce the quantity of evidence that the auditor needs to obtain.
Answer: C. Higher assessed risk requires MORE evidence, not less. The other three statements
correctly describe sufficiency and appropriateness.
,3. [Multiple choice] Which statement about professional judgment and bias (ISA 200) is
INCORRECT?
A) Confirmation bias is the tendency to seek information that is consistent with the auditor's initial
belief.
B) The availability heuristic is mitigated by relying more heavily on the information that most easily
comes to mind.
C) Anchoring is the tendency to start from an initial value and then adjust insufficiently away from
it.
D) Overconfidence bias is the tendency to overestimate one's own ability, and is mitigated by
challenging assumptions.
Answer: B. The availability heuristic is the tendency to over-rely on easily recalled information; it is
mitigated by asking why it comes to mind and obtaining objective data, not by relying on it more.
The other three statements are correct.
4. [Multiple choice] According to ISA 210, which statement is INCORRECT?
A) If management imposes a scope limitation that would lead to a disclaimer, the auditor should
generally still accept the engagement to maintain the client relationship.
B) The preconditions for an audit include an acceptable financial-reporting framework and
management's acknowledgement of its responsibilities.
C) Management must agree to provide the auditor with unrestricted access to information and to
people within the entity.
D) The engagement letter records the objective and scope of the audit and the responsibilities of
management and of the auditor.
Answer: A. If a pre-acceptance scope limitation would lead to a disclaimer, the auditor should
NOT accept the engagement (unless law requires it). The other three statements are correct.
5. [Multiple choice] According to ISA 230, which statement is INCORRECT?
A) After the file has been assembled, the auditor may delete superseded documentation at any
time to keep the file concise.
B) Documentation should enable an experienced auditor with no previous connection to the audit
to understand the work performed.
C) The final audit file should be assembled on a timely basis, ordinarily within 60 days of the date
of the auditor's report.
D) In Belgium audit documentation must be retained for at least ten years.
, Answer: A. After assembly, documentation must not be deleted before the end of the retention
period. The other three statements are correct.
6. [Multiple choice] According to ISA 260, which statement is INCORRECT?
A) The auditor communicates the planned scope and timing of the audit to those charged with
governance.
B) Good practice is that the auditor never meets the audit committee without management being
present, to preserve transparency.
C) The auditor communicates significant findings, including significant difficulties encountered and
significant matters discussed with management.
D) The auditor communicates a statement on the auditor's independence to those charged with
governance.
Answer: B. Good practice is precisely the opposite: the auditor should meet those charged with
governance WITHOUT management present at least annually. The other three statements are
correct.
7. [Multiple choice] According to ISA 240, which statement is INCORRECT?
A) The auditor is responsible for detecting all fraud committed within the entity, regardless of its
size or materiality.
B) The auditor's responsibility is to obtain reasonable assurance that the statements as a whole
are free from material misstatement caused by fraud or error.
C) The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error.
D) Management has the primary responsibility for the prevention and detection of fraud.
Answer: A. The auditor is responsible for reasonable assurance about MATERIAL misstatement,
not for detecting all fraud. The other three statements are correct.
8. [Multiple choice] Which statement about the fraud triangle (ISA 240) is INCORRECT?
A) Incentive or pressure is one element, for example the need to meet targets or obtain financing.
B) Opportunity is one element, for example weak monitoring or internal-control deficiencies.
C) Only one of the three elements needs to be present for fraud to occur.
D) Rationalisation is one element, for example an attitude that justifies the dishonest act.
, Answer: C. The fraud triangle posits that all three elements are typically present together. The
other three statements correctly describe the elements.
9. [Multiple choice] Which statement about the presumed significant risks under ISA 240 is
INCORRECT?
A) Management override of controls is treated as a significant risk on every audit.
B) Inventory counting errors are the only presumed fraud risk identified by ISA 240.
C) Revenue recognition is presumed to be a fraud risk.
D) Responses to management override include testing manual journal entries and reviewing
estimates for bias.
Answer: B. The two presumed risks are management override of controls and revenue
recognition, not inventory counting. The other three statements are correct.
10. [Multiple choice] According to ISA 300, which statement is INCORRECT?
A) Planning helps the auditor devote appropriate attention to important areas and resolve
problems on a timely basis.
B) Planning assists in selecting the engagement team and directing and supervising its work.
C) Planning assists in coordinating the work of component auditors and experts.
D) Planning is a discrete, one-off phase that, once completed, is never revisited during the
engagement.
Answer: D. Planning is continual and iterative throughout the engagement; it is not a one-off
phase. The other three statements are correct.
11. [Multiple choice] According to ISA 315 (Revised), which statement is INCORRECT?
A) The objective is to identify and assess the risks of material misstatement at the financial-
statement and assertion levels.
B) The revised standard introduces inherent risk factors to promote more consistent risk
assessment.
C) The revised standard reduces the auditor's attention to information technology and removes the
involvement of IT specialists.
D) Risk-assessment procedures include inquiries, analytical procedures, and observation and
inspection.
questions)
KU Leuven - International Auditing - 100 exam-style questions with model answers
Answers are shown in red beneath each question.
Multiple-choice questions are labelled A-D; some ask for the INCORRECT statement, some for the
CORRECT/best answer - read each stem carefully.
Cover the red answers and attempt each question first.
Part A — Multiple-choice questions (identify the requested statement)
1. [Multiple choice] According to ISA 200, which statement is INCORRECT?
A) The overall objective is to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error.
B) Reasonable assurance is a high level of assurance, but it is not absolute, and the auditor is not
expected to reduce audit risk to zero.
C) Because the auditor must obtain absolute assurance, the audit is designed so that no material
misstatement can ever go undetected.
D) Professional skepticism is an attitude that includes a questioning mind and a critical
assessment of audit evidence.
Answer: C. ISA 200 requires reasonable, not absolute, assurance; some audit risk always
remains. The other three statements correctly describe the objective and professional skepticism.
2. [Multiple choice] Which statement about sufficient appropriate audit evidence (ISA 200) is
INCORRECT?
A) Appropriateness is the measure of the quality of audit evidence, namely its relevance and its
reliability.
B) Sufficiency is the measure of the quantity of audit evidence, affected by the assessed risks and
the quality of the evidence.
C) The higher the assessed risk of material misstatement, the less audit evidence the auditor
needs to obtain.
D) Higher-quality evidence may reduce the quantity of evidence that the auditor needs to obtain.
Answer: C. Higher assessed risk requires MORE evidence, not less. The other three statements
correctly describe sufficiency and appropriateness.
,3. [Multiple choice] Which statement about professional judgment and bias (ISA 200) is
INCORRECT?
A) Confirmation bias is the tendency to seek information that is consistent with the auditor's initial
belief.
B) The availability heuristic is mitigated by relying more heavily on the information that most easily
comes to mind.
C) Anchoring is the tendency to start from an initial value and then adjust insufficiently away from
it.
D) Overconfidence bias is the tendency to overestimate one's own ability, and is mitigated by
challenging assumptions.
Answer: B. The availability heuristic is the tendency to over-rely on easily recalled information; it is
mitigated by asking why it comes to mind and obtaining objective data, not by relying on it more.
The other three statements are correct.
4. [Multiple choice] According to ISA 210, which statement is INCORRECT?
A) If management imposes a scope limitation that would lead to a disclaimer, the auditor should
generally still accept the engagement to maintain the client relationship.
B) The preconditions for an audit include an acceptable financial-reporting framework and
management's acknowledgement of its responsibilities.
C) Management must agree to provide the auditor with unrestricted access to information and to
people within the entity.
D) The engagement letter records the objective and scope of the audit and the responsibilities of
management and of the auditor.
Answer: A. If a pre-acceptance scope limitation would lead to a disclaimer, the auditor should
NOT accept the engagement (unless law requires it). The other three statements are correct.
5. [Multiple choice] According to ISA 230, which statement is INCORRECT?
A) After the file has been assembled, the auditor may delete superseded documentation at any
time to keep the file concise.
B) Documentation should enable an experienced auditor with no previous connection to the audit
to understand the work performed.
C) The final audit file should be assembled on a timely basis, ordinarily within 60 days of the date
of the auditor's report.
D) In Belgium audit documentation must be retained for at least ten years.
, Answer: A. After assembly, documentation must not be deleted before the end of the retention
period. The other three statements are correct.
6. [Multiple choice] According to ISA 260, which statement is INCORRECT?
A) The auditor communicates the planned scope and timing of the audit to those charged with
governance.
B) Good practice is that the auditor never meets the audit committee without management being
present, to preserve transparency.
C) The auditor communicates significant findings, including significant difficulties encountered and
significant matters discussed with management.
D) The auditor communicates a statement on the auditor's independence to those charged with
governance.
Answer: B. Good practice is precisely the opposite: the auditor should meet those charged with
governance WITHOUT management present at least annually. The other three statements are
correct.
7. [Multiple choice] According to ISA 240, which statement is INCORRECT?
A) The auditor is responsible for detecting all fraud committed within the entity, regardless of its
size or materiality.
B) The auditor's responsibility is to obtain reasonable assurance that the statements as a whole
are free from material misstatement caused by fraud or error.
C) The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error.
D) Management has the primary responsibility for the prevention and detection of fraud.
Answer: A. The auditor is responsible for reasonable assurance about MATERIAL misstatement,
not for detecting all fraud. The other three statements are correct.
8. [Multiple choice] Which statement about the fraud triangle (ISA 240) is INCORRECT?
A) Incentive or pressure is one element, for example the need to meet targets or obtain financing.
B) Opportunity is one element, for example weak monitoring or internal-control deficiencies.
C) Only one of the three elements needs to be present for fraud to occur.
D) Rationalisation is one element, for example an attitude that justifies the dishonest act.
, Answer: C. The fraud triangle posits that all three elements are typically present together. The
other three statements correctly describe the elements.
9. [Multiple choice] Which statement about the presumed significant risks under ISA 240 is
INCORRECT?
A) Management override of controls is treated as a significant risk on every audit.
B) Inventory counting errors are the only presumed fraud risk identified by ISA 240.
C) Revenue recognition is presumed to be a fraud risk.
D) Responses to management override include testing manual journal entries and reviewing
estimates for bias.
Answer: B. The two presumed risks are management override of controls and revenue
recognition, not inventory counting. The other three statements are correct.
10. [Multiple choice] According to ISA 300, which statement is INCORRECT?
A) Planning helps the auditor devote appropriate attention to important areas and resolve
problems on a timely basis.
B) Planning assists in selecting the engagement team and directing and supervising its work.
C) Planning assists in coordinating the work of component auditors and experts.
D) Planning is a discrete, one-off phase that, once completed, is never revisited during the
engagement.
Answer: D. Planning is continual and iterative throughout the engagement; it is not a one-off
phase. The other three statements are correct.
11. [Multiple choice] According to ISA 315 (Revised), which statement is INCORRECT?
A) The objective is to identify and assess the risks of material misstatement at the financial-
statement and assertion levels.
B) The revised standard introduces inherent risk factors to promote more consistent risk
assessment.
C) The revised standard reduces the auditor's attention to information technology and removes the
involvement of IT specialists.
D) Risk-assessment procedures include inquiries, analytical procedures, and observation and
inspection.
