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ACCA Audit and Assurance (AA) 2024 past questions and answers

This 2024 ACCA Audit and Assurance (AA) set has 20 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2024 set with instant marking.

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Sample ACCA Audit and Assurance (AA) 2024 questions

1. Aster Ltd's auditor has obtained sufficient appropriate evidence and plans to issue an unmodified opinion. Which statement best describes the assurance provided by the audit?
  1. The auditor guarantees that the financial statements contain no fraud or error.
  2. The auditor obtains reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error.
  3. The auditor confirms that every transaction has been recorded accurately.
  4. The auditor provides absolute assurance that the accounting records are complete.

Answer: B. The auditor obtains reasonable assurance that the financial statements are free from material misstatement, whether due to fraud or error.

An audit provides reasonable, not absolute, assurance that the financial statements as a whole are free from material misstatement. It does not guarantee detection of every fraud, error or inaccurate transaction.

2. During planning for Vale Ltd, the auditor sets materiality for the financial statements as a whole. Which consideration is most relevant when setting this amount?
  1. The amount of the audit fee agreed with management
  2. The number of employees who prepare the accounts
  3. The auditor's estimate of the total hours needed for the audit
  4. Whether a misstatement, individually or with others, could reasonably influence users' economic decisions

Answer: D. Whether a misstatement, individually or with others, could reasonably influence users' economic decisions

Materiality is judged by whether misstatements could reasonably influence users' decisions, considering their size, nature and circumstances. Audit fees and staffing do not define materiality.

3. The board of Lumen Ltd wants its internal audit function to be able to report concerns about senior management without interference. Which arrangement best supports the function's organisational independence?
  1. The head of internal audit reports functionally to the audit committee, which approves the plan and receives findings.
  2. The head of internal audit reports only to the financial controller, whose area is frequently reviewed.
  3. Internal audit findings are sent to the managers responsible for the activities reviewed, who decide whether the board should see them.
  4. The chief executive approves each internal audit conclusion before it is issued.

Answer: A. The head of internal audit reports functionally to the audit committee, which approves the plan and receives findings.

Functional reporting to the audit committee strengthens internal audit's ability to communicate findings independently of the areas under review. Reporting solely through management whose work may be reviewed can impair objectivity.

4. Nexa Ltd recognises revenue from online orders when goods are dispatched. In the final week of the year, sales staff receive bonuses for meeting a revenue target, and some orders are dispatched after year-end. Which assertion is most directly at risk for year-end revenue?
  1. Classification
  2. Completeness
  3. Cut-off
  4. Presentation

Answer: C. Cut-off

The timing of dispatch in relation to year-end creates a risk that sales are recorded in the wrong accounting period, which is a cut-off risk. Classification and presentation do not address the timing issue.

5. At planning, the auditor of Bracken Ltd compares monthly gross profit margins with the prior year and finds a sharp increase in December. What is the most appropriate next step?
  1. Treat the increase as conclusive evidence that December revenue is correct.
  2. Ask management for an explanation and corroborate it with other audit evidence.
  3. Reduce all substantive testing because the margin has improved.
  4. Issue a qualified opinion because the analytical procedure produced an unexpected result.

Answer: B. Ask management for an explanation and corroborate it with other audit evidence.

A planning analytical procedure helps identify areas requiring investigation; an unusual fluctuation should be discussed and corroborated. An analytical result alone is not conclusive evidence and does not itself require a modified opinion.

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