Question 1

What percentage of listed Australian companies have an audit committee?

Accepted Answer

A)  90% 
B)  50% 
C)  75% 
D)  10% 
A)  90% 
B)  50% 
C)  75% 
D)  10%

Question 2

The ASX listing rules require listed companies who do not have an audit committee to establish an audit committee within three years.

Accepted Answer

A) True 
 B)False

Question 3

The ASX Corporate Governance Principles do NOT include:

Accepted Answer

A)  respecting the rights of shareholders. 
B)  remunerating fairly and responsibly. 
C)  safeguarding integrity in financial reporting. 
D)  maximising the profits of shareholders. 
A)  respecting the rights of shareholders. 
B)  remunerating fairly and responsibly. 
C)  safeguarding integrity in financial reporting. 
D)  maximising the profits of shareholders.

Question 4

The regulatory mechanisms addressing corporate governance in Australia emphasise:

Accepted Answer

A)  the Australian Securities Exchange's Corporate Governance Council Principles of Good Governance and Best Practice Recommendations. 
B)  accountability and transparency through the auditor. 
C)  accountability and transparency through required disclosures. 
D)  all of the above 
A)  the Australian Securities Exchange's Corporate Governance Council Principles of Good Governance and Best Practice Recommendations. 
B)  accountability and transparency through the auditor. 
C)  accountability and transparency through required disclosures. 
D)  all of the above

Question 5

The audit expectations gap can be attributed to:

Accepted Answer

A)  audit failure. 
B)  business failure. 
C)  the limitation to the role of the independent audit. 
D)  all of the above 
A)  audit failure. 
B)  business failure. 
C)  the limitation to the role of the independent audit. 
D)  all of the above

Question 6

Does the Code of Ethics for Professional Accountants permit a public accounting firm to undertake bookkeeping and audit services for the same client?

Accepted Answer

Yes, but only in limited circumstances.

Question 7

The Code of Ethics for Professional Accountants should be considered as individual rules applicable to individual members according to their circumstances.

Accepted Answer

A) True 
 B)False

Question 8

The reasons for the resignation of an incumbent auditor must be reported to the:

Accepted Answer

A)  client. 
B)  AARF. 
C)  ASX. 
D)  ASIC. 
A)  client. 
B)  AARF. 
C)  ASX. 
D)  ASIC.

Question 9

Society has attached a special meaning to the term 'professional.' A professional is:

Accepted Answer

A)  a person expected to conduct himself or herself at a higher level than most other members of society. 
B)  any person who receives pay for services performed. 
C)  a person who has both on- the- job experience received under an experienced supervisor and specific education relevant to the trade. 
D)  a person who has attained tertiary qualifications as a prerequisite to joining the job market. 
A)  a person expected to conduct himself or herself at a higher level than most other members of society. 
B)  any person who receives pay for services performed. 
C)  a person who has both on- the- job experience received under an experienced supervisor and specific education relevant to the trade. 
D)  a person who has attained tertiary qualifications as a prerequisite to joining the job market.

Question 10

One of the fundamental principles of the Code of Ethics for Professional Accountants deals with professional behaviour. This requires accountants to:

Accepted Answer

A)  be straightforward and honest. 
B)  maintain their knowledge and skill at an appropriately high level. 
C)  refrain from any conduct that may bring discredit to their profession. 
D)  all of the above 
A)  be straightforward and honest. 
B)  maintain their knowledge and skill at an appropriately high level. 
C)  refrain from any conduct that may bring discredit to their profession. 
D)  all of the above

Question 11

One primary reason why people act unethically is:

Accepted Answer

A)  selfishness. 
B)  the effect of the media. 
C)  poor education. 
D)  their political values. 
A)  selfishness. 
B)  the effect of the media. 
C)  poor education. 
D)  their political values.

Question 12

An audit partner may own shares in a company that is an audit client if the value of the shares is immaterial.

Accepted Answer

A) True 
 B)False

Question 13

Explain why there is a special need for ethical conduct in the auditing profession.

Accepted Answer

Since users (e.g. the general public) of

Question 14

Ethics can be defined as:

Accepted Answer

A)  adhering to society's norms and laws. 
B)  a set of moral principles or values. 
C)  adhering to a code of professional conduct. 
D)  integrity, loyalty and the pursuit of excellence. 
A)  adhering to society's norms and laws. 
B)  a set of moral principles or values. 
C)  adhering to a code of professional conduct. 
D)  integrity, loyalty and the pursuit of excellence.

Question 15

An example of a self- interest threat is:

Accepted Answer

A)  the auditor will promote a client's position. 
B)  the auditor not appropriately evaluating the results of an associate auditor. 
C)  a financial interest influencing the auditor's judgement. 
D)  the auditor being influenced by undue pressure from the audit client. 
A)  the auditor will promote a client's position. 
B)  the auditor not appropriately evaluating the results of an associate auditor. 
C)  a financial interest influencing the auditor's judgement. 
D)  the auditor being influenced by undue pressure from the audit client.

Question 16

Auditors should NOT use confidential auditee information for personal gain:

Accepted Answer

A)  under any circumstances. 
B)  without the permission of the client and the audit engagement partner. 
C)  without the permission of the client. 
D)  unless requested to do so by the client. 
A)  under any circumstances. 
B)  without the permission of the client and the audit engagement partner. 
C)  without the permission of the client. 
D)  unless requested to do so by the client.

Question 17

'Independence' in auditing means:

Accepted Answer

A)  not being financially dependent on the client. 
B)  not being an advocate for the client. 
C)  remaining aloof from the client. 
D)  taking an unbiased viewpoint. 
A)  not being financially dependent on the client. 
B)  not being an advocate for the client. 
C)  remaining aloof from the client. 
D)  taking an unbiased viewpoint.

Question 18

Which one of the following policies and procedures is NOT required by ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information?

Accepted Answer

A)  Remunerating the auditor fairly and responsibly 
B)  Acceptance and continuance of client relationships and specific engagements 
C)  Ethical requirements (including independence) 
D)  Leadership responsibilities for quality on audits 
A)  Remunerating the auditor fairly and responsibly 
B)  Acceptance and continuance of client relationships and specific engagements 
C)  Ethical requirements (including independence) 
D)  Leadership responsibilities for quality on audits

Question 19

Part B of the Code of Ethics identifies threats to independence from the following sources:

Accepted Answer

A)  familiarity and intimidation. 
B)  self- interest, self- review and advocacy. 
C)  both A and B 
D)  the work environment 
A)  familiarity and intimidation. 
B)  self- interest, self- review and advocacy. 
C)  both A and B 
D)  the work environment

Question 20

Section 290 in Part B of the Code sets minimum standards of conduct regarding:

Accepted Answer

A)  independence. 
B)  auditor switching. 
C)  fees and other types of remuneration. 
D)  gifts and hospitality. 
A)  independence. 
B)  auditor switching. 
C)  fees and other types of remuneration. 
D)  gifts and hospitality.

What percentage of listed Australian companies have an audit committee?

The ASX listing rules require listed companies who do not have an audit committee to establish an audit committee within three years.

The ASX Corporate Governance Principles do NOT include:

The regulatory mechanisms addressing corporate governance in Australia emphasise:

The audit expectations gap can be attributed to:

Does the Code of Ethics for Professional Accountants permit a public accounting firm to undertake bookkeeping and audit services for the same client?

The Code of Ethics for Professional Accountants should be considered as individual rules applicable to individual members according to their circumstances.

The reasons for the resignation of an incumbent auditor must be reported to the:

Society has attached a special meaning to the term 'professional.' A professional is:

One of the fundamental principles of the Code of Ethics for Professional Accountants deals with professional behaviour. This requires accountants to:

One primary reason why people act unethically is:

An audit partner may own shares in a company that is an audit client if the value of the shares is immaterial.

Explain why there is a special need for ethical conduct in the auditing profession.

Ethics can be defined as:

An example of a self- interest threat is:

Auditors should NOT use confidential auditee information for personal gain:

'Independence' in auditing means:

Which one of the following policies and procedures is NOT required by ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information?

Part B of the Code of Ethics identifies threats to independence from the following sources:

Section 290 in Part B of the Code sets minimum standards of conduct regarding:

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Audit of Transaction Cycles and Financial Statement Balances II

Completing the Audit

Audit Reporting

Other Auditing and Assurance Engagements

Filters

Exam 3: Audit Quality and Ethics

What percentage of listed Australian companies have an audit committee?

The ASX listing rules require listed companies who do not have an audit committee to establish an audit committee within three years.

The ASX Corporate Governance Principles do NOT include:

The regulatory mechanisms addressing corporate governance in Australia emphasise:

The audit expectations gap can be attributed to:

Does the Code of Ethics for Professional Accountants permit a public accounting firm to undertake bookkeeping and audit services for the same client?

The Code of Ethics for Professional Accountants should be considered as individual rules applicable to individual members according to their circumstances.

The reasons for the resignation of an incumbent auditor must be reported to the:

Society has attached a special meaning to the term 'professional.' A professional is:

One of the fundamental principles of the Code of Ethics for Professional Accountants deals with professional behaviour. This requires accountants to:

One primary reason why people act unethically is:

An audit partner may own shares in a company that is an audit client if the value of the shares is immaterial.

Explain why there is a special need for ethical conduct in the auditing profession.

Ethics can be defined as:

An example of a self- interest threat is:

Auditors should NOT use confidential auditee information for personal gain:

'Independence' in auditing means:

Which one of the following policies and procedures is NOT required by ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information?

Part B of the Code of Ethics identifies threats to independence from the following sources:

Section 290 in Part B of the Code sets minimum standards of conduct regarding:

Demand for Audit and Assurance Services

Auditors Legal Environment

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Documentation

Materiality and Risk

Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Completing Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling

Audit of Transaction Cycles and Financial Statement Balances I

Audit of Transaction Cycles and Financial Statement Balances II

Completing the Audit

Audit Reporting

Other Auditing and Assurance Engagements

Filters