ICAN Advanced Audit, Assurance and Forensics 2024 past questions and answers

1. Require every engagement team to use the same standard audit programme without changing the firm's quality system.
2. Assess the quality risk arising from the firm's technology-related work and design a tailored response, such as training, specialist support and monitoring of evidence procedures.
3. Transfer responsibility for audit quality to the cloud software providers because they control the systems.
4. Wait for a regulatory inspection before deciding whether the repeated finding needs a response.

Answer: B. Assess the quality risk arising from the firm's technology-related work and design a tailored response, such as training, specialist support and monitoring of evidence procedures.

ISQM 1 requires a proactive, risk-based system: identify and assess quality risks and design responses proportionate to them. Standard programmes alone or deferring action do not address the identified recurring risk.

1. The report must not be dated until the engagement quality review is completed.
2. The report may be dated if the audit committee accepts the remaining review risk.
3. The report may be dated because the engagement partner, rather than the reviewer, signs it.
4. The review can be completed after the report date if no adjustment is eventually proposed.

Answer: A. The report must not be dated until the engagement quality review is completed.

ISQM 2 requires the engagement quality review to be completed on or before the date of the engagement report. Approval by the audit committee or the engagement partner's signature does not replace that requirement.

1. Accept the trip if its value is disclosed to the audit committee after the audit.
2. Accept it because the offer is made by the client rather than by a member of the audit team.
3. Decline the offer and evaluate whether the circumstances create threats to objectivity or professional behaviour requiring further action.
4. Accept it if the engagement partner promises not to discuss audit findings during the trip.

Answer: C. Decline the offer and evaluate whether the circumstances create threats to objectivity or professional behaviour requiring further action.

A valuable hospitality offer can create unacceptable self-interest, familiarity or intimidation threats, and its timing heightens the concern. Declining it and evaluating the threats is appropriate; disclosure or a promise is not an adequate substitute.

1. The group engagement partner is responsible only for the consolidation adjustments made at head office.
2. The component auditor automatically assumes responsibility for the group auditor's opinion on the component.
3. Responsibility for the group opinion is divided in proportion to each firm's audit fee.
4. The group engagement partner retains overall responsibility for managing and achieving quality on the group audit, including directing, supervising and reviewing the work as appropriate.

Answer: D. The group engagement partner retains overall responsibility for managing and achieving quality on the group audit, including directing, supervising and reviewing the work as appropriate.

ISA 600 (Revised) reinforces the group engagement partner's overall responsibility for managing and achieving quality on the group audit and for sufficient appropriate group audit evidence. Use of a component auditor does not divide that responsibility by fee or component.

1. Accept the component auditor's conclusion because a signed report is sufficient evidence for the group.
2. Discuss the restriction and its implications, then determine whether alternative procedures can provide sufficient appropriate evidence; if not, consider the effect on the group opinion.
3. Exclude the component from the consolidation even if it remains controlled by the group.
4. Refer to the component auditor in the group opinion to transfer responsibility for the evidence gap.

Answer: B. Discuss the restriction and its implications, then determine whether alternative procedures can provide sufficient appropriate evidence; if not, consider the effect on the group opinion.

The group team must obtain sufficient appropriate evidence and assess the effect of restricted access, including through alternative procedures. A component report does not itself cure an evidence limitation, and simply referring to the component auditor does not transfer responsibility.