Cima F1 Exam Question No 34

Question No 34:

Which ONE of the following would be considered to be an example of an indirect tax?

A. An entity assessed for corporate income tax on its profit.
B. An individual purchases goods in a shop, the price includes VAT.
C. An employee has tax deducted from salary through the PAYE system.
D. An individual pays capital gains tax on a gain arising on the disposal of an investment.

Answer: B

Cima F1 Exam Question No 33

Question No 33:

To apply the fundamental principles of the Code of Ethics, existing and potential threats to the entity first need to be identified and evaluated?

A. Confidentiality threat
B. Self-interest threats
C. Self-review threats
D. Familiarity threats
E. Integrity threats
F. Objectivity threats

Answer: B, C, D

Cima F1 Exam Question No 32

Question No 32:

HOTSPOT

Whilst undertaking an external audit, the auditor has identified that there is insufficient evidence to support the financial statements.
As a result the auditors consider these financial statements to be wholly unreliable for decision making purposes.

This will result in a modified audit report with the opinion being 

Cima F1 Exam Question No 31

Question No 31:

Which THREE of the following must an auditor consider in order to form an opinion on the truth and fairness of an entity's financial statements?

A. Whether the entity has kept proper accounting records.
B. Whether the entity has complied with the relevant legislator requirements in respect of the necessary disclosures.
C. Whether all the information and explanations necessary for the purposes of the audit have been received.
D. Whether every transaction that underpins the financial statements has been correctly recorded.
E. Whether the entity has been exposed to any fraud.

Answer: A, B, C

Cima F1 Exam Question No 30

Question No 30:

Which of the following is NOT a principle in the CIMA Code of Ethics for Professional Accountants?

A. Integrity
B. Professional competence and due care
C. Timeliness
D. Objectivity

Answer: C

Cima F1 Exam Question No 29

Question No 29:

A customer of CDF went bankrupt on 15 January 2014 owing CDF $75,000. CDF’s profit for the year ended 31 December 2013 was $750,000 and its statement of financial position at that date showed trade receivables of $300,000. CDF has not provided for any bad debts for the year ended 31 December 2013. This is material but not fundamental.
Which ONE of the following types of audit report should the external auditor of CDF issue for the financial statements of CDF for the year ended 31 December 2013?

A. A modified report with a qualified opinion in respect of receivables.
B. A modified report with a disclaimer opinion.
C. A modified report with an adverse opinion.
D. A modified report with an emphasis of matter paragraph.

Answer: A

Cima F1 Exam Question No 28

Question No 28:

Which of the following methods could be used by a tax authority to reduce tax evasion and avoidance?

A. Increase tax rates to compensate for losses due to evasion.
B. Reduce penalties for avoidance.
C. Reduce requirements to have tax returns audited.
D. Simplify the tax structure, minimizing allowances and exemptions.

Answer: D