AUI4861 Exam Pack 2025 [Latest Questions and
Verified Answers] || Complete Study Resource
Description:
AUI4861 Exam Pack updated for 2025. Includes verified questions and answers
covering auditing and assurance topics. Perfect exam study companion.
Keywords:
AUI4861 exam pack 2025
auditing exam prep
AUI4861 verified answers
AUI4861 study guide
AUI4861 complete solutions
Section A: Fundamental Auditing Concepts & Ethics
1. What is the primary objective of an external audit?
A) To detect all instances of fraud within the company.
B) To prepare the financial statements for the client.
C) To provide an opinion on whether the financial statements are free from
material misstatement.
D) To ensure the company's future profitability.
2. The concept of independence in auditing refers to:
A) The auditor's freedom from conflicts of interest and undue influence from the
client.
B) The audit firm being financially dependent on the audit fees from one client.
C) The auditor being an employee of the company being audited.
D) The client's ability to dictate the scope of the audit.
3. Which of the following is a fundamental ethical principle for professional
accountants as per the IESBA Code?
A) Advocacy
B) Confidentiality
,C) Profitability
D) Delegation
4. What is the purpose of an Engagement Letter?
A) To guarantee the company is not committing fraud.
B) To define the terms, objectives, and scope of the audit engagement.
C) To serve as a contract for non-audit services only.
D) To provide a management representation letter.
5. The risk that an auditor will give an inappropriate audit opinion when the
financial statements are materially misstated is known as:
A) Inherent Risk
B) Control Risk
C) Detection Risk
D) Audit Risk
6. Inherent Risk is highest for accounts that involve:
A) Simple calculations.
B) High volume of routine transactions.
C) Complex calculations and significant management judgment.
D) Strong internal controls.
7. Which of the following best describes "Reasonable Assurance"?
A) A guarantee that the financial statements are 100% accurate.
B) A high, but not absolute, level of assurance that the financial statements are free
of material misstatement.
C) A low level of assurance provided by a review engagement.
D) An opinion limited to certain aspects of the financial statements.
8. The "Going Concern" assumption implies that:
A) The company is about to be liquidated.
B) The company will continue in operational existence for the foreseeable future.
C) The company has no significant debts.
D) The company's assets are valued at market price.
, 9. What is the role of the IAASB?
A) To regulate stock exchanges.
B) To set International Standards on Auditing (ISAs).
C) To manage a specific country's auditing profession.
D) To prosecute fraudulent companies.
10. Professional skepticism involves:
A) Assuming management is dishonest.
B) A questioning mind and critical assessment of audit evidence.
C) Blindly trusting management's representations.
D) Focusing only on documentary evidence.
Section B: Audit Planning and Risk Assessment
11. The first standard of fieldwork requires the audit to be:
A) Completed within budget.
B) Planned and performed with an attitude of professional skepticism.
C) Designed to detect all illegal acts.
D) Approved by the client's board.
12. The overall audit strategy does NOT typically include:
A) Determining the resources needed for the audit.
B) Setting the materiality level.
C) The detailed audit procedures for each account balance.
D) Identifying characteristics of the engagement.
13. Analytical procedures used in planning are primarily designed to:
A) Serve as substantive tests.
B) Identify areas of potential misstatement and unusual transactions.
C) Replace tests of controls.
D) Provide final evidence for the audit opinion.
14. Which of the following is NOT a typical component of Audit Risk?
A) Inherent Risk
B) Control Risk
Verified Answers] || Complete Study Resource
Description:
AUI4861 Exam Pack updated for 2025. Includes verified questions and answers
covering auditing and assurance topics. Perfect exam study companion.
Keywords:
AUI4861 exam pack 2025
auditing exam prep
AUI4861 verified answers
AUI4861 study guide
AUI4861 complete solutions
Section A: Fundamental Auditing Concepts & Ethics
1. What is the primary objective of an external audit?
A) To detect all instances of fraud within the company.
B) To prepare the financial statements for the client.
C) To provide an opinion on whether the financial statements are free from
material misstatement.
D) To ensure the company's future profitability.
2. The concept of independence in auditing refers to:
A) The auditor's freedom from conflicts of interest and undue influence from the
client.
B) The audit firm being financially dependent on the audit fees from one client.
C) The auditor being an employee of the company being audited.
D) The client's ability to dictate the scope of the audit.
3. Which of the following is a fundamental ethical principle for professional
accountants as per the IESBA Code?
A) Advocacy
B) Confidentiality
,C) Profitability
D) Delegation
4. What is the purpose of an Engagement Letter?
A) To guarantee the company is not committing fraud.
B) To define the terms, objectives, and scope of the audit engagement.
C) To serve as a contract for non-audit services only.
D) To provide a management representation letter.
5. The risk that an auditor will give an inappropriate audit opinion when the
financial statements are materially misstated is known as:
A) Inherent Risk
B) Control Risk
C) Detection Risk
D) Audit Risk
6. Inherent Risk is highest for accounts that involve:
A) Simple calculations.
B) High volume of routine transactions.
C) Complex calculations and significant management judgment.
D) Strong internal controls.
7. Which of the following best describes "Reasonable Assurance"?
A) A guarantee that the financial statements are 100% accurate.
B) A high, but not absolute, level of assurance that the financial statements are free
of material misstatement.
C) A low level of assurance provided by a review engagement.
D) An opinion limited to certain aspects of the financial statements.
8. The "Going Concern" assumption implies that:
A) The company is about to be liquidated.
B) The company will continue in operational existence for the foreseeable future.
C) The company has no significant debts.
D) The company's assets are valued at market price.
, 9. What is the role of the IAASB?
A) To regulate stock exchanges.
B) To set International Standards on Auditing (ISAs).
C) To manage a specific country's auditing profession.
D) To prosecute fraudulent companies.
10. Professional skepticism involves:
A) Assuming management is dishonest.
B) A questioning mind and critical assessment of audit evidence.
C) Blindly trusting management's representations.
D) Focusing only on documentary evidence.
Section B: Audit Planning and Risk Assessment
11. The first standard of fieldwork requires the audit to be:
A) Completed within budget.
B) Planned and performed with an attitude of professional skepticism.
C) Designed to detect all illegal acts.
D) Approved by the client's board.
12. The overall audit strategy does NOT typically include:
A) Determining the resources needed for the audit.
B) Setting the materiality level.
C) The detailed audit procedures for each account balance.
D) Identifying characteristics of the engagement.
13. Analytical procedures used in planning are primarily designed to:
A) Serve as substantive tests.
B) Identify areas of potential misstatement and unusual transactions.
C) Replace tests of controls.
D) Provide final evidence for the audit opinion.
14. Which of the following is NOT a typical component of Audit Risk?
A) Inherent Risk
B) Control Risk
