Thursday 27 August 2015

Cima F1 Exam Question No 19

Question No 19:

At its financial year end HX has an outstanding legal action against it by a large multinational entity. It is highly probable that the legal action will be successful and HX will have to pay substantial damages. HX has refused to provide for these damages.
In the opinion of the auditor, failure to make this provision means that the financial statements are seriously misleading.
What type of audit report will be issued in this situation?

A.
A modified report with an adverse opinion
B.
An unmodified report with an emphasis of matter paragraph
C.
A modified report with a disclaimer of opinion
D.
A modified report with a qualified opinion

Answer: A

Thursday 20 August 2015

Cima F1 Exam Question No 18

Question No 18:

What type of audit report will be issued in this situation?

A. A modified report with an adverse opinion
B. An unmodified report with an emphasis of matter paragraph
C. A modified report with a disclaimer of opinion
D. A modified report with a qualified opinion

Answer: A

Wednesday 12 August 2015

Cima F1 Exam Question No 17

Question No 17:

MX suffered a major fire in its central warehouse on 14 March 2014. Inventory held in the warehouse with a value of $700,000 was either damaged or destroyed. An external audit of MX’s financial statements discovered that the loss had not been recognized in MX’s financial statements. This is regarded as material but not pervasive.
What type of audit report should the auditor issue for MX’s financial statements for the year ended 31 March 2014?

A.
A modified report, with a qualified opinion based on insufficient appropriate evidence.
B.
A modified report, with a qualified opinion, with a qualified “except for” opinion.
C.
An unmodified report with an unqualified opinion.
D.
An unmodified report with an emphasis of matter paragraph relating to the inventory.

Answer: B

Thursday 6 August 2015

Cima F1 Exam Question No 16

Question No 16:

Under the current structure of regulatory bodies, which organisation is responsible for seeking out the views of its members and passing them on in summary form to the International Accounting Standards Board (IASB)?

A.
IFRS Interpretations Committee
B.
International Organization of Securities Commissions
C.
IFRS Foundation
D.
IFRS Advisory Council

Answer: D