Question 1 :

Mélanie Giroux is finalizing the accrued utilities file for Coastline Tool Rentals Ltd.

• The continuity schedule agrees to the lead sheet balance of C$9,600.
• The December accrual is based on an estimate because the invoice had not yet been received at year-end.
• The conclusion says, "Balance agrees to underlying invoices with no issues noted."

What is the main documentation problem?

The continuity schedule should tie directly to the draft statements rather than to the lead sheet

The conclusion describes invoice support more strongly than the documented work supports

The page should avoid mentioning invoices whenever any estimate is used

The estimate can be treated as invoice-supported if the prior-year amount was similar

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Question 2 :

Jules Martin starts with each cash receipt posted on December 31, 2025 and traces it to the remittance advice, deposit slip, and bank stamp. What concern is that work designed to test most directly?

Whether some customer payments received before year-end were left out of the books

Whether recorded year-end cash receipts are supported by actual customer remittances and deposits

Whether recorded cash receipts were measured using the wrong customer amount

Whether January receipts were later applied against the wrong customer account

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Question 3 :

A shareholder Q&A drafted for Pine Ridge Millwork Ltd. includes this sentence: "Because the company received a clean audit opinion, shareholders can rely on management's forecasted debt covenant compliance for next year." What must be revised before the Q&A is circulated?

Replace it with wording that the audit opinion is on the historical financial statements, not on forecasted covenant compliance

Replace it with wording that the audit confirms future covenant compliance unless a going-concern issue was reported

Keep it if the forecast used board-approved assumptions

Keep it if the current ratio at year-end exceeded the loan covenant

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Question 4 :

At Riverstone Dental Supplies Ltd., Andrée Nadeau performs a surprise petty cash count on December 30, 2025 and prepares a count sheet listing cash and vouchers on hand. Which item is the strongest evidence of petty cash on hand at the count time?

The petty cash log maintained by the custodian

The custodian's statement that no receipts were missing

The January replenishment cheque for petty cash

The auditor-prepared count sheet from the surprise count signed at the cash count

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Question 5 :

Before sending confirmations for Larch Valley Sports Ltd., Amélie Fortin is told by the controller not to contact two large customers because "they are sensitive accounts" and management will provide emails instead. What should Amélie conclude before finalizing the confirmation plan?

Use management-provided emails as supplemental evidence and keep the two customers in the confirmation sample

The request is a fraud-risk indicator that should be challenged and escalated

Send confirmations only after management reviews and approves the wording for those customers

Replace direct confirmations for those customers with subsequent-cash testing only

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Audit Fundamentals & CAS Basics

MCQ

0

5

Jules Martin starts with each cash receipt posted on December 31, 2025 and traces it to the remittance advice, deposit slip, and bank stamp. What concern is that work designed to test most directly?

MCQ

0

5

A shareholder Q&A drafted for Pine Ridge Millwork Ltd. includes this sentence: "Because the company received a clean audit opinion, shareholders can rely on management's forecasted debt covenant compliance for next year." What must be revised before the Q&A is circulated?

MCQ

0

5

At Riverstone Dental Supplies Ltd., Andrée Nadeau performs a surprise petty cash count on December 30, 2025 and prepares a count sheet listing cash and vouchers on hand. Which item is the strongest evidence of petty cash on hand at the count time?

MCQ

0

5

Before sending confirmations for Larch Valley Sports Ltd., Amélie Fortin is told by the controller not to contact two large customers because "they are sensitive accounts" and management will provide emails instead. What should Amélie conclude before finalizing the confirmation plan?

MCQ

0

5