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ICMA Pakistan Audit & Assurance Flashcards
53 question-and-answer cards covering Audit & Assurance as it is examined in ICMA Pakistan. 24 of them are printed below, taken from across the deck — no signup, no paywall on the preview.
24 sample cards from the Audit & Assurance deck
Sampled from the end of the deck, so these are different cards from the ones shown on the syllabus page.
What are the main purposes served by segregation of duties?
To reduce the opportunity for any one person to both perpetrate and conceal errors or fraud by separating the functions of authorising transactions, recording transactions, and maintaining custody of assets.
What is a test of controls and when does the auditor perform them?
A test of controls is an audit procedure designed to evaluate the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements. The auditor performs them when intending to rely on controls (assessing control risk as less than high) or when substantive procedures alone cannot provide sufficient appropriate evidence.
Give examples of procedures used to test the operating effectiveness of controls.
Inquiry of relevant personnel; observation of the control being applied; inspection of documents/reports for evidence of control performance; and re-performance of the control by the auditor.
Distinguish a control deficiency from a significant deficiency in internal control (ISA 265).
A deficiency exists when a control is unable to prevent/detect misstatements, or a necessary control is missing. A significant deficiency is one (or a combination) that, in the auditor's professional judgment, is of sufficient importance to merit the attention of those charged with governance.
To whom and how does the auditor report internal control deficiencies?
Significant deficiencies must be communicated in writing on a timely basis to those charged with governance. Other (less significant) deficiencies are communicated to management at an appropriate level of responsibility (often via a management/letter of weaknesses).
What makes audit evidence 'sufficient' and 'appropriate'?
Sufficiency is the measure of the quantity of evidence (affected by assessed risk and quality). Appropriateness is the measure of its quality, comprising relevance (does it address the assertion) and reliability.
What factors generally make audit evidence more reliable?
Evidence is more reliable when obtained from independent external sources; when related internal controls are effective; when obtained directly by the auditor; when in documentary form (paper or electronic) rather than oral; and when provided by original documents rather than copies.
List the financial statement assertions about classes of transactions and events.
Occurrence, Completeness, Accuracy, Cut-off, Classification, and Presentation.
List the financial statement assertions about account balances at period end.
Existence, Rights and obligations, Completeness, Accuracy/valuation and allocation, Classification, and Presentation.
List the types of audit procedures used to obtain audit evidence.
Inspection, Observation, External confirmation, Recalculation, Re-performance, Analytical procedures, and Inquiry.
What are substantive procedures and their two categories?
Substantive procedures are audit procedures designed to detect material misstatements at the assertion level. The two categories are: (1) tests of details (of transactions and balances) and (2) substantive analytical procedures.
What are analytical procedures and where in the audit are they required?
Analytical procedures are evaluations of financial information through analysis of plausible relationships among financial and non-financial data. They are required at the risk assessment (planning) stage and at the overall review (final/completion) stage, and may also be used as substantive procedures.
Define audit sampling.
The application of audit procedures to less than 100% of the items within a population of audit relevance such that all sampling units have a chance of selection, in order to provide a reasonable basis for the auditor to draw conclusions about the entire population.
Distinguish sampling risk from non-sampling risk.
Sampling risk is the risk that the auditor's conclusion based on a sample differs from the conclusion if the whole population were tested. Non-sampling risk is the risk of an erroneous conclusion for any reason unrelated to sampling, e.g. using inappropriate procedures or misinterpreting evidence.
Distinguish statistical from non-statistical sampling.
Statistical sampling uses random selection and probability theory to measure and evaluate sampling risk quantitatively. Non-statistical (judgmental) sampling relies on the auditor's judgment to select the sample and evaluate results, without a quantified measure of sampling risk.
Which assertion is primarily tested by directional testing from the source documents to the records (vouching the other way), and what is the key risk for receivables versus payables?
For trade receivables the key risk is overstatement (test existence by tracing recorded balances to external confirmations/evidence). For trade payables the key risk is understatement/completeness (search for unrecorded liabilities).
What is the primary audit procedure to verify the existence of trade receivables, and what are positive and negative confirmations?
External (direct) confirmation of balances with customers. A positive confirmation asks the customer to reply confirming agreement or disagreement; a negative confirmation asks for a reply only if the customer disagrees, providing weaker evidence.
What is the principal audit procedure for verifying the existence and condition of inventory?
Attendance at the physical inventory count, observing the count, performing test counts (from records to floor for existence and floor to records for completeness), and assessing the condition of items for valuation.
How is inventory valued for audit purposes and what is tested?
Inventory is measured at the lower of cost and net realisable value (IAS 2). The auditor tests cost (e.g. FIFO/weighted average) by reference to invoices and NRV by reference to post-year-end selling prices, checking for slow-moving or obsolete items.
What are subsequent events and the two types under ISA 560?
Subsequent events are events occurring between the date of the financial statements and the date of the auditor's report (and facts discovered after). Adjusting events provide evidence of conditions existing at the reporting date (adjust the figures); non-adjusting events are indicative of conditions arising after the reporting date (disclose if material).
What is the going concern basis, and what is the auditor's responsibility regarding it (ISA 570)?
The going concern basis assumes the entity will continue in operation for the foreseeable future. The auditor must obtain sufficient appropriate evidence about, and conclude on, the appropriateness of management's use of the going concern basis, and whether a material uncertainty exists. If a material uncertainty is adequately disclosed, the opinion is unmodified with a 'Material Uncertainty Related to Going Concern' section; if inadequately disclosed, the opinion is modified.
What are written representations and why are they obtained (ISA 580)?
Written representations are written statements by management to the auditor confirming certain matters or supporting other evidence (e.g. that management has fulfilled its responsibilities and disclosed all relevant information). They are necessary audit evidence but are not sufficient on their own and do not relieve the auditor of other procedures. They are required at or near the date of the auditor's report.
What is the purpose of the overall review of financial statements at the completion stage?
To assess, using analytical procedures and overall evaluation, whether the financial statements are consistent with the auditor's knowledge of the business, whether accounting policies are appropriate and adequately disclosed, and whether the financial statements as a whole give a true and fair view and comply with the applicable framework.
What is the difference between fraud and error in an audit context?
Both result in misstatements. Error is an unintentional misstatement (e.g. a mistake in processing data). Fraud is an intentional act by one or more individuals involving deception to obtain an unjust or illegal advantage; for the auditor it is distinguished by intent and includes fraudulent financial reporting and misappropriation of assets.
What this deck covers
The Audit & Assurance deck follows the ICMA Pakistan Audit & Assurance syllabus — 7 chapters and 21 topics — so questions land on material that is genuinely examinable rather than trivia around it. That works out to roughly 7.6 cards per chapter.
Answers are written to be recallable, not just readable — averaging about 266 characters, which is long enough to carry the reasoning and short enough to say out loud.
A deck like this earns its keep on the second and third pass. Read the syllabus first so you know the shape of the subject, then use the cards to find the specific facts that have not stuck.
Audit & Assurance flashcards FAQ
How many Audit & Assurance flashcards are in this ICMA Pakistan deck?
53 cards. This page previews 24 of them, sampled evenly across the deck so you can judge the difficulty before installing anything.
Are these ICMA Pakistan flashcards free?
Yes. The preview here is free to read with no signup, and the full 53-card deck is free inside the Examius app.
What do the Audit & Assurance cards cover?
They follow the ICMA Pakistan Audit & Assurance syllabus — 7 chapters and 21 topics — so the questions track what is actually examinable.
How should I use these flashcards?
Read the syllabus first so you know the shape of the subject, then drill the deck. Examius schedules each card with spaced repetition, so cards you keep missing come back sooner and ones you know drift further apart.