Question

25. XYZ Ltd (XYZ) is a listed company with an audit committee comprising three of the eight board members. XYZ's auditor would communicate matters of governance with:

Select one:

1. Management, Audit committee and the Board of Directors
2. Only the Audit Committee and never the full Board of Directors
3. Management only
4. Either the audit committee, the Board of Directors or both.

28. The balance sheet date for the auditee is 30 June 2018. Based on preliminary work carried out at the planning stage, the auditor decides to move all substantive testing of inventory to 30 June 2018, instead of the original planned date of 31 May. Which of the following risks would be reduced? Select which two options are correct.

Select one or more:

1. Inherent
2. Detection
3. Audit
4. Control

31. Which TWO of the following statements about materiality are correct?

Select one or more:

1. Materiality is based on the auditor's experience and judgement.
2. Materiality if always based on revenue
3. Materiality should only be calculated at the planning stage of the audit.
4. Information is material if its omission or misstatement could influence the economic decisions of users of the financial statements

Answer 1

Required 25

Only the Audit Committee and never the full Board of Directors

This is because, XYZ is a listed entity and in case of a listed entity, the auditors report to the TCWG

Required 28

Inherent Risk and Detection Risk

Required 31

The correct statements are

Materiality is based on the auditor's experience and judgement..

Information is material if its omission or misstatement could influence the economic decisions of users of the financial statements

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