ICAN Advanced Audit, Assurance and Forensics 2026 past questions and answers

1. Treat each omission as an isolated clerical matter and close the review because the opinions were unmodified.
2. Immediately remove all engagement partners from client work without investigating the cause.
3. Evaluate the finding, investigate its root cause and severity, and design proportionate remedial actions within the firm's system of quality management.
4. Wait until the next external inspection before changing the firm's procedures.

Answer: C. Evaluate the finding, investigate its root cause and severity, and design proportionate remedial actions within the firm's system of quality management.

ISQM 1 requires the firm to evaluate findings, investigate deficiencies and their root causes, and respond with appropriate remedial action. An unmodified opinion does not make a recurring quality deficiency immaterial, so option A is not adequate.

1. The reviewer must complete the engagement quality review and communicate that it is complete; the report cannot be dated before then.
2. The engagement partner may date the report and ask the reviewer to complete the review afterward.
3. The reviewer should make the accounting decision for management and sign the financial statements.
4. The reviewer should replace the engagement partner and issue the report personally.

Answer: A. The reviewer must complete the engagement quality review and communicate that it is complete; the report cannot be dated before then.

Under ISQM 2, an engagement quality review must be completed on or before the date of the engagement report, including resolution of concerns raised by the reviewer. The reviewer evaluates significant judgments and conclusions but does not take over management's or the engagement partner's responsibilities.

1. Accept the offer if the client records it as a marketing expense.
2. Allow the spouse to attend while the manager stays home, without telling the firm.
3. Accept it but disclose it in the engagement letter after appointment.
4. Decline the offer, promptly inform the appropriate firm personnel, and assess whether any related circumstances create threats to compliance with the fundamental principles.

Answer: D. Decline the offer, promptly inform the appropriate firm personnel, and assess whether any related circumstances create threats to compliance with the fundamental principles.

A lavish benefit from a prospective audit client can create significant self-interest, familiarity, or intimidation threats and may be intended to influence judgment; declining and reporting it is appropriate. The client's accounting treatment does not remove the auditor's ethical threat, so option A is wrong.

1. Accept the component auditor's report without further work because the subsidiary has a separate statutory audit.
2. Assess the component auditor's competence, capabilities and relevant ethical compliance, communicate the group team's requirements, and determine the nature and extent of involvement needed to obtain sufficient appropriate group-audit evidence.
3. Refer to the component auditor in the group opinion, which automatically transfers responsibility for the component to that auditor.
4. Use only the component's management accounts because the group auditor is not permitted to use another auditor's work.

Answer: B. Assess the component auditor's competence, capabilities and relevant ethical compliance, communicate the group team's requirements, and determine the nature and extent of involvement needed to obtain sufficient appropriate group-audit evidence.

The group engagement team evaluates the component auditor and determines how its work will be used and reviewed in light of group risks. The group engagement partner remains responsible for the group audit opinion; a separate statutory opinion alone is not sufficient evidence.

1. Accept the valuation because the expert, not the auditor, is responsible for the underlying data.
2. Replace the expert's valuation with management's estimate without further procedures.
3. Evaluate the relevance and reliability of the data and assumptions used, discuss the omission with the expert, and perform further procedures as needed to assess whether the expert's work is adequate for audit purposes.
4. Disclaim an opinion immediately whenever an expert's report uses client-provided information.

Answer: C. Evaluate the relevance and reliability of the data and assumptions used, discuss the omission with the expert, and perform further procedures as needed to assess whether the expert's work is adequate for audit purposes.

ISA 620 requires the auditor to evaluate the adequacy of the expert's work, including the relevance and reasonableness of significant data and assumptions. Using an expert does not transfer the auditor's responsibility for obtaining sufficient appropriate evidence, so option A is wrong.