Wednesday, 20 September 2017

Cima F1 Exam Question No 59

Question No 59:

An external auditor has completed an audit and is satisfied that proper records have been maintained and that the financial statements reflect those transactions. However the auditor has one disagreement with the management of the entity. The disagreement involves the treatment of one large item of expenditure that has been classified by management as an increase in non-current assets. The auditor is of the opinion that the item should have been classified as maintenance and charged as an
expense to the statement of comprehensive income. The amount is material in the context of the reported profit for the year. Assuming that the management refuse to change their approach, which ONE of the following modified audit reports should the auditor use?

A. Emphasis of matter
B. “Except for” qualification
C. Adverse opinion
D. Disclaimer of opinion

Answer: B

Wednesday, 28 June 2017

Cima F1 Exam Question No 59

Question No 59:

When the parent sells to the associate?
  • - Increase COGS (which has an impact on Group RE in W5)
  • - Reduce W5 retained earnings (group reserves)
  • - Reduce investment in associate (CSFP)
the profit must be eliminated from the investment in associate because the inventory is in the books of the associate. The associate's inventory is not consolidated so we cannot remove the profit from the inventory line on the CSFP.

Tuesday, 6 June 2017

Cima F1 Exam Question No 58

Question No 58:

The IASB’s Framework for the preparation and presentation of financial statements lists four qualitative characteristics of financial statements, one of which is reliability. Which ONE of the following lists three characteristics of reliability?

A. Neutrality, prudence and comparability.
B. Prudence, faithful representation and relevance.
C. Comparability, relevance and completeness.
D. Neutrality, faithful representation and prudence.

Answer: D