ISA 510, Initial audit engagements-opening balances
ISA 510 provides guidance on the auditor’s responsibilities in relation to opening balances where the financial statements for the prior period were not audited. Here on MCQs.club we have prepared easy Multiple-Choice Questions (MCQs) on ISA 510 revised IFAC that fully cover the ISA 510 summary, ISA 510, Initial audit engagements-opening balances MCQs with answers, these MCQs are a basis of conclusions. These MCQ on SA 510 are helpful for Competitive exams, Professional Accountancy exams and Business management exams.
- ISA 510 provides guidance on the auditor’s responsibilities in relation to opening balances where:
- the financial statements for the prior period were not audited
- the financial statements for the prior period were audited by another auditor (the predecessor auditor)
- Both A&B
- The objective of the auditor when considering an initial audit engagement is to obtain sufficient appropriate audit evidence about whether:
- the opening balances contain misstatements that materially affect the current period’s financial statements
- appropriate accounting policies reflected in the opening balances have been consistently applied in the current period (or a change of accounting policy has been properly accounted for and disclosed).
- Both A&B
- What audit procedures are required by the auditor while considering an initial audit engagement – opening balances:
- Read the most recent financial statements and audit report, if any, for information relevant to opening balances.
- Check that the prior period’s closing balances have been correctly brought forward.
- Check that opening balances reflect appropriate accounting policies.
- All of the above
- Where the prior period was audited by another auditor or unaudited, the auditors will need to perform additional work in order to satisfy themselves regarding the opening position.
- If there is an inability to obtain sufficient appropriate evidence over the opening balances, a qualified or disclaimer of opinion will be issued.
- If the opening balances are materially misstated or the accounting policies have not been consistently applied, a qualified or adverse opinion will be issued.
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