AA ethics

As part of your planning work you have identified a number of potential risks to independence. Indicate whether each of the following potential risks could give rise to an advocacy threat. Yes /No

(1) The audit engagement partner has been asked to attend meetings with potential investors.

• yes

• no

As part of your planning work you have identified a number of potential risks to independence. Indicate whether each of the following potential risks could give rise to an advocacy threat. Yes /No

(2) Currant & Co has been offered the opportunity to provide other services to Orange Financials.

• yes

• no

As part of your planning work you have identified a number of potential risks to independence. Indicate whether each of the following potential risks could give rise to an advocacy threat. Yes /No

(3) Currant & Co has been asked to produce the financial statements of Orange Financials.

• yes

• no

As part of your planning work you have identified a number of potential risks to independence. Indicate whether each of the following potential risks could give rise to an advocacy threat. Yes /No

(4) There is a suggestion that a partner who previously worked for Orange Financials should be the review partner.

• yes

• no

Currant & Co has been offered work by Orange Financials. This is dependent on the audit being completed with minimal issues. Which TWO of the following threats does this situation create?

• A. Intimidation

• B. Self-interest

• C. Familiarity

• D. Advocacy

The finance director has made two offers to members of the audit team: (1) Weekend away (2) Loan at reduced rates. Which of the following correctly summarises which of the offers, if any, can be accepted?

• A. Accepted /Accepted

• B. Accepted/Not accepted

• C. Not accepted/ Accepted

• D. Not accepted /Not accepted

The board has noted down a number of statements relating to the audit committee and has asked you to confirm whether their understanding is correct. Indicate whether the following statements are true or false. True/ False

1. The audit committee should be made up of independent non-executive directors

• true

• false

The board has noted down a number of statements relating to the audit committee and has asked you to confirm whether their understanding is correct. Indicate whether the following statements are true or false. True/ False

2. The audit committee normally appoints the external auditors at the AGM

• true

• false

The board has noted down a number of statements relating to the audit committee and has asked you to confirm whether their understanding is correct. Indicate whether the following statements are true or false. True/ False

3. The audit committee monitors and reviews the internal audit function

• true

• false

The board has noted down a number of statements relating to the audit committee and has asked you to confirm whether their understanding is correct. Indicate whether the following statements are true or false. True/ False

4. The audit committee sets out the scope of the external auditor's work

• true

• false