Auditor Qualification Examination (Chamber of Auditors and Expert Accountants of Armenia) Feed

Question

Under ISA 200 (Overall Objectives of the Independent Auditor), what level of assurance is an external auditor required to obtain before expressing an audit opinion on whether financial statements are free from material misstatement?

Audit And Internal Control

Question · Easy

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Which of the following is NOT one of the five fundamental ethical principles for professional accountants established by the IESBA Code of Ethics and adopted by the Chamber of Auditors and Expert Accountants of Armenia (CAAA)?

Audit And Internal Control

Question · Easy

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Under ISA 210 (Agreeing the Terms of Audit Engagements), which of the following conditions must be established as a precondition for accepting an audit engagement?

Audit And Internal Control

Question · Medium

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In the audit risk model (Audit Risk = Inherent Risk × Control Risk × Detection Risk), if the auditor assesses both Inherent Risk and Control Risk as high for inventory valuation, what should the auditor do regarding Detection Risk to maintain acceptable overall audit risk?

Audit And Internal Control

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Under ISA 320 (Materiality in Planning and Performing an Audit), how is 'Performance Materiality' defined and applied during an audit?

Audit And Internal Control

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According to ISA 330 (The Auditor's Responses to Assessed Risks), in which circumstance is the auditor MANDATED to perform substantive procedures regardless of the assessed risk of material misstatement?

Audit And Internal Control

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Under ISA 500 (Audit Evidence), which of the following sources of audit evidence is generally considered the MOST reliable?

Audit And Internal Control

Question · Easy

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When sending external trade receivables confirmations under ISA 505 (External Confirmations), what is the difference between a positive confirmation request and a negative confirmation request?

Audit And Internal Control

Question · Easy

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Under ISA 520 (Analytical Procedures), which of the following statements regarding the use of analytical procedures at different stages of an audit is TRUE?

Audit And Internal Control

Question · Medium

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In audit sampling (ISA 530), what is 'sampling risk' and which two erroneous conclusions can it produce in a test of controls?

Audit And Internal Control

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When auditing complex accounting estimates such as fair value measurements or expected credit loss allowances under ISA 540 (Revised), which of the following is a primary procedure for the auditor?

Audit And Internal Control

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Under ISA 550 (Related Parties), why do related party transactions present an inherently higher risk of material misstatement due to fraud or error?

Audit And Internal Control

Question · Medium

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A client company has an accounting year-end of December 31, 2025. On February 15, 2026, before the financial statements are authorized and before the audit report is signed, a major customer declared bankruptcy due to deteriorating financial distress that had existed throughout 2025. Under IAS 10 and ISA 560, how should this event be treated?

Audit And Internal Control

Question · Medium

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Under ISA 570 (Going Concern), if the auditor concludes that management's use of the going concern basis of accounting is appropriate, but a material uncertainty exists regarding events or conditions that cast significant doubt on the entity's ability to continue as a going concern, and this uncertainty is ADEQUATELY DISCLOSED in the financial statements, what opinion should the auditor express?

Audit And Internal Control

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Under ISA 705 (Modifications to the Opinion in the Independent Auditor's Report), which modified audit opinion must be issued when the auditor obtains sufficient appropriate audit evidence that misstatements are BOTH material and PERVASIVE to the financial statements?

Audit And Internal Control

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Under ISA 701 (Communicating Key Audit Matters in the Independent Auditor's Report), how are Key Audit Matters (KAM) selected and communicated?

Audit And Internal Control

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Under ISA 706 (Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor's Report), when is an 'Emphasis of Matter' paragraph appropriately used?

Audit And Internal Control

Question · Easy

Question

Under ISA 240 (The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements), what are the three conditions that generally make up the 'Fraud Triangle'?

Audit And Internal Control

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Under ISA 265 (Communicating Deficiencies in Internal Control to Those Charged With Governance and Management), what defines a 'Significant Deficiency' in internal control?

Audit And Internal Control

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Under ISA 600 (Special Considerations — Audits of Group Financial Statements), who bears ultimate responsibility for the group audit opinion on consolidated financial statements?

Audit And Internal Control

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Under ISA 610 (Using the Work of Internal Auditors), what must the external auditor evaluate before deciding whether and to what extent to use the work of the internal audit function?

Audit And Internal Control

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When an auditor engages an external valuation specialist to value specialized real estate assets under ISA 620 (Using the Work of an Auditor's Expert), what is the auditor's responsibility regarding the expert's work?

Audit And Internal Control

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Under ISA 580 (Written Representations), what is the required date of written representations provided by management to the external auditor?

Audit And Internal Control

Question · Easy

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Under the IESBA Code of Ethics and CAAA independence standards for Public Interest Entities (PIEs in Armenia, such as banks and listed entities), what is the mandatory partner rotation rule for the Lead Audit Engagement Partner?

Audit And Internal Control

Question · Hard

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Under International Standard on Quality Management 1 (ISQM 1), which of the following is a mandatory component of an audit firm's system of quality management?

Audit And Internal Control

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Question

Under IAS 1 (Presentation of Financial Statements), which of the following practices is STRICTLY PROHIBITED unless explicitly required or permitted by an International Financial Reporting Standard?

Financial Reporting Ifrs

Question · Easy

Question

An Armenian manufacturing company holds 1,000 units of finished goods in inventory. The historical cost per unit is 5,000 AMD. Due to market changes, the estimated selling price is 4,800 AMD per unit, and estimated costs to complete and sell are 300 AMD per unit. Under IAS 2 (Inventories), at what total value should this inventory be recognized in the statement of financial position?

Financial Reporting Ifrs

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A company purchases heavy production equipment for 20,000,000 AMD on January 1, 2025. It pays 1,000,000 AMD for non-refundable import duties, 500,000 AMD for site preparation, 500,000 AMD for professional delivery and installation, and 300,000 AMD for an opening promotional event. Environmental law requires dismantling the equipment at the end of its 10-year useful life, with a present value of decommissioning costs estimated at 2,000,000 AMD. Under IAS 16 (Property, Plant and Equipment), what is the initial capitalized cost of the equipment?

Financial Reporting Ifrs

Question · Medium

Question

A company acquired a commercial building on January 1, 2024, for 100,000,000 AMD with an estimated useful life of 50 years and zero residual value (depreciation 2,000,000 AMD/year). On December 31, 2025, after 2 years of depreciation (carrying amount 96,000,000 AMD), the company adopts the revaluation model under IAS 16 and an independent appraisal values the building at 120,000,000 AMD. How should this revaluation surplus be recognized?

Financial Reporting Ifrs

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Under IAS 23 (Borrowing Costs), which of the following assets qualifies for the capitalization of interest/borrowing costs directly incurred during its construction period?

Financial Reporting Ifrs

Question · Easy

Question

A company owns a specialised production machine with a carrying amount of 50,000,000 AMD. At the reporting date, there are indicators of impairment. Fair value less costs of disposal is estimated at 42,000,000 AMD. Value in use (present value of expected future cash flows from continuing use) is estimated at 45,000,000 AMD. Under IAS 36 (Impairment of Assets), what is the impairment loss to be recognized in profit or loss?

Financial Reporting Ifrs

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Under IAS 37 (Provisions, Contingent Liabilities and Contingent Assets), what three criteria MUST all be met simultaneously to recognize a Provision as a liability in the statement of financial position?

Financial Reporting Ifrs

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On December 20, 2025, the Board of Directors of an Armenian telecom company approved a formal plan to restructure and close a regional branch in Gyumri. On December 27, 2025, the company announced the closure plan in detail to the affected employees and trade unions, creating a valid expectation. Redundancy payments are reliably estimated at 15,000,000 AMD, lease penalty termination fees at 3,000,000 AMD, and future staff retraining for remaining operations at 4,000,000 AMD. Under IAS 37, what restructuring provision should be recognized at December 31, 2025?

Financial Reporting Ifrs

Question · Hard

Question

An IT company in Armenia spent 10,000,000 AMD on research to identify potential new cloud encryption algorithms during the first half of 2025. In the second half of 2025, after proving technical feasibility and obtaining committed commercial funding to complete and market the software, it spent an additional 15,000,000 AMD on development. Under IAS 38 (Intangible Assets), how should these expenditures be accounted for?

Financial Reporting Ifrs

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What is the 5-step revenue recognition model mandated by IFRS 15 (Revenue from Contracts with Customers)?

Financial Reporting Ifrs

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A company sells a software license and 1 year of technical support as a bundled package for a total contracted price of 10,000,000 AMD. The standalone selling price of the software license if sold separately is 9,000,000 AMD, and the standalone selling price of 1 year of technical support is 3,000,000 AMD (total standalone prices = 12,000,000 AMD). Under IFRS 15, how should the 10,000,000 AMD transaction price be allocated to the software license and technical support?

Financial Reporting Ifrs

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Under IFRS 16 (Leases), how must a lessee account for a standard 5-year operating lease of office space in its statement of financial position from the commencement date?

Financial Reporting Ifrs

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On January 1, 2025, a company enters into a 3-year lease for warehouse equipment with annual payments of 5,000,000 AMD payable at the end of each year. The lessee's incremental borrowing rate is 10% per annum. Present value factor for a 3-year ordinary annuity at 10% is 2.48685 (giving an initial Lease Liability and ROU Asset of 12,434,250 AMD). For the year ended December 31, 2025, what total expenses (interest expense + straight-line depreciation) will be recognized in Profit or Loss under IFRS 16?

Financial Reporting Ifrs

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Under IFRS 9 (Financial Instruments), which classification model requires a debt instrument (e.g. corporate bond) to be held within a business model whose objective is to collect contractual cash flows, where cash flows represent Solely Payments of Principal and Interest (SPPI)?

Financial Reporting Ifrs

Question · Medium

Question

At December 31, 2025, an Armenian entity has equipment with an accounting carrying amount of 40,000,000 AMD and a tax base (tax written down value) of 30,000,000 AMD. The statutory corporate profit tax rate in Armenia is 18%. Under IAS 12 (Income Taxes), what is the resulting deferred tax position?

Financial Reporting Ifrs

Question · Hard

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Under IAS 8 (Accounting Policies, Changes in Accounting Estimates and Errors), how must an entity account for a change in an accounting estimate (such as revising the useful life of machinery from 10 years to 7 years)?

Financial Reporting Ifrs

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Under IAS 21 (The Effects of Changes in Foreign Exchange Rates), how are monetary items (such as foreign currency trade receivables or foreign currency bank deposits) translated at the end of each reporting period?

Financial Reporting Ifrs

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Question

Parent Company acquires 80% of the voting shares of Subsidiary Company on January 1, 2025, for cash consideration of 120,000,000 AMD. At acquisition date, the fair value of Subsidiary's identifiable net assets is 100,000,000 AMD. Parent elects to measure Non-Controlling Interest (NCI) at its proportionate share of Subsidiary's identifiable net assets (20% × 100,000,000 = 20,000,000 AMD). Under IFRS 3 (Business Combinations), what is the goodwill recognized in the consolidated financial statements?

Financial Reporting Ifrs

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Under IAS 28 (Investments in Associates and Joint Ventures), what is the standard accounting method applied to an investment where the investor has 'Significant Influence' (typically holding 20% to 50% of voting rights)?

Financial Reporting Ifrs

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Under IAS 33 (Earnings Per Share), how is Basic Earnings Per Share (Basic EPS) calculated?

Financial Reporting Ifrs

Question · Medium

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