Reference no: EM132621449

Problem 1: Which financial statement assertion is threatened when the organisation has recorded sales that didn't take place?

Option 1: Occurrence

Option 2: Completeness

Option 3: Accuracy

Option 4: Classification

Problem 2: The assertion of cut-off would be at risk when:

Option 1: the accounting information system accepts a value that is incorrect (e.g. 122 instead of 22).

Option 2: the accounting information system accepts a fictitious sale.

Option 3: the accounting information system includes a sale for the next financial year in this year's revenue figure.

Option 4: a revenue item is classified as an expense when entering the transaction.

Problem 3: Which of the following statements regarding risks for a business is false?

Option 1: Risks can come from both internal and external factors.

Option 2: Risks faced by an organisation will always have consequences for the financial statements.

Option 3: Management needs to be aware of and evaluate the risks that the organisation faces.

Option 4: The risks identified will have varying probabilities of eventuating.