Question 1

Which of the following are objectives of the audit planning procedure?

Options :

A : To work out the time and resources required for the audit.

B : To perform substantive tests.

C : To work out how audit evidence will be obtained.

D : To perform analytical review to identify possible areas for investigation.

E : To set out how audit objectives will be achieved.

Answer: A,C

Question 2

With regard to the rote of the audit committee which of the following statements are correct? Select ALL that apply

Options :

A : The audit committee should design the system of internal controls

B : The audit committee should decide annually whether it needs an internal audit function

C : The audit committee should decide annually whether it needs an external audit function

D : The audit committee should review and monitor the effectiveness of the company-s internal audit function

E : The audit committee should provide arrangements for whistle blowing

F : The audit committee should engage consultants to carry out business reviews

Answer: A,D

Question 3

COM is a well established company in the construction industry The company was founded by the Mac family 30 years ago and several family members still serve on the Board The company obtained a listing five years ago The Board has an appropriate balance between executive and non-executive members It also has audit remuneration and nomination committees The average age of board members is 68

COM is profitable but profit margins have been falling steadily and this year's revenues are lower than it was achieved last year The Board recognis thai it does not have a long term strategy in place and has been losing business to newer, more aggressive competitors

Which THREE of the following statements are correct?

Options :

A : The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM-s long term strategy

B : The nomination committee should have had a succession plan in place for directors.

C : The nomination committee should be operating for the benefit of the directors.

D : The audit committee should have alerted the Board to the impact of falling profit margins

E : The non-executive directors should have challenged the lack of long term strategic planning

Answer: A,B

Question 4

DFR is an online retailer that sells picture frames The software running on DFR's website enables customers to log in and make purchases by inputting an email address as a user name and a password that must contain at least eight characters, including upper and lower case letters, numbers and punctuation marks (e.g. , $ or!) Once logged in, customers can check previous orders that they have placed.

Customers can also use DFR's website to change personal details, including credit card numbers and delivery addresses Whenever they wish to use those facilities, the software sends a text message containing a six-digit number to their mobile phones They must input that number before the system will accept changes to their personal details

Which TWO of the following statements are correct?

Options :

A : It is illogical to have different security measures in place for orders and for access to personal details.

B : The software treats customers' personal details as being more sensitive than their ordering histories

C : The arrangement with the text message will have no effect on the security associated with changing personal details

D : Customers should be able to update the mobile phone numbers in their DFR accounts using only their email addresses and passwords for access

E : The software should never show the whole of a customer-s credit card number on screen, even if the customer has logged in and input the six-digit number.

Answer: A,C

Question 5

The acronym VPN stands for.

Options :

A : Verified Private Network

B : Virtual Private Network

C : Very Personal Network

D : Virtual Personal Network

Answer: B

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