Question 1

The disadvantage of including general statements in a code of professional ethics is:

Accepted Answer

A)  there are usually too many to remember. 
B)  the difficulty of enforcing general ideals without minimum standards of ideal behaviour. 
C)  that they identify ideal conduct. 
D)  the emphasis on positive activities. 
A)  there are usually too many to remember. 
B)  the difficulty of enforcing general ideals without minimum standards of ideal behaviour. 
C)  that they identify ideal conduct. 
D)  the emphasis on positive activities.

Question 2

APES 110 Code of Professional Conduct considers a material direct financial interest in an audit client to be:

Accepted Answer

A)  the auditor having a loan from an audit client who is a financial institution. 
B)  charging a fee contingent upon an outcome. 
C)  accepting commissions from an audit client. 
D)  providing taxation services to a client. 
A)  the auditor having a loan from an audit client who is a financial institution. 
B)  charging a fee contingent upon an outcome. 
C)  accepting commissions from an audit client. 
D)  providing taxation services to a client.

Question 3

Fees for audit engagements should take into account:

Accepted Answer

A)  the degree of responsibility the work entails. 
B)  independence. 
C)  other services provided. 
D)  fee dependence. 
A)  the degree of responsibility the work entails. 
B)  independence. 
C)  other services provided. 
D)  fee dependence.

Question 4

The Code of Ethics for Professional Accountants is issued by the:

Accepted Answer

A)  Australian Securities Exchange. 
B)  Australian Professional Ethics Standards Board. 
C)  Australian Accounting Standards Board. 
D)  Corporations Act. 
A)  Australian Securities Exchange. 
B)  Australian Professional Ethics Standards Board. 
C)  Australian Accounting Standards Board. 
D)  Corporations Act.

Question 5

Explain the "conceptual approach" referred to in APES110.

Accepted Answer

CONCEPTUAL FRAMEWORK APPROACH
The APESB'

Question 6

The auditor's ultimate defence where conflicts are sufficiently great so as to compromise objectivity is:

Accepted Answer

A)  APES 110. 
B)  the working papers. 
C)  whistle blowing. 
D)  resignation. 
A)  APES 110. 
B)  the working papers. 
C)  whistle blowing. 
D)  resignation.

Question 7

ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information requires policies and procedures including:

Accepted Answer

A)  ethical requirements (including independence). 
B)  acceptance and continuance of client relationships and specific engagements. 
C)  leadership responsibilities for quality on audits. 
D)  all of the above 
A)  ethical requirements (including independence). 
B)  acceptance and continuance of client relationships and specific engagements. 
C)  leadership responsibilities for quality on audits. 
D)  all of the above

Question 8

To preserve audit independence, the review partner must rotate every 5 years.

Accepted Answer

A) True 
 B)False

Question 9

Subsection 290.176 of the Code of Ethics for Professional Accountants prohibits the provision of which one of the following to an audit client?

Accepted Answer

A)  Attestation services 
B)  Management consulting services 
C)  Other assurance services 
D)  Independent valuation services 
A)  Attestation services 
B)  Management consulting services 
C)  Other assurance services 
D)  Independent valuation services

Question 10

According to the profession's ethical standards, an auditor would be considered independent in which one of the following instances?

Accepted Answer

A)  The auditor is also a solicitor advising the client. 
B)  The client owes the auditor fees for the last two annual audits. 
C)  An employee of the audit firm acts as the honorary treasurer for a charity that is an audit client. 
D)  The auditor's main bank account is held at a client financial institution. 
A)  The auditor is also a solicitor advising the client. 
B)  The client owes the auditor fees for the last two annual audits. 
C)  An employee of the audit firm acts as the honorary treasurer for a charity that is an audit client. 
D)  The auditor's main bank account is held at a client financial institution.

Question 11

A public accounting firm should decline an offer to perform management advisory services if:

Accepted Answer

A)  the proposed engagement is not accounting- related. 
B)  recommendations to be made by the firm are to be subject to review by the client. 
C)  the firm audits the financial statements of a subsidiary of the prospective client. 
D)  acceptance would require the firm to make management decisions for an audit client. 
A)  the proposed engagement is not accounting- related. 
B)  recommendations to be made by the firm are to be subject to review by the client. 
C)  the firm audits the financial statements of a subsidiary of the prospective client. 
D)  acceptance would require the firm to make management decisions for an audit client.

Question 12

When audit working papers are viewed by another party as part of a peer review, the permission of the client must be obtained.

Accepted Answer

A) True 
 B)False

Question 13

When there are substantial unpaid fees outstanding from previous audit work:

Accepted Answer

A)  independence can be compromised if the unpaid fees take on the character of a loan. 
B)  the audit opinion should be withheld. 
C)  the auditor should seek removal from office. 
D)  a fee premium can be applied to the current audit. 
A)  independence can be compromised if the unpaid fees take on the character of a loan. 
B)  the audit opinion should be withheld. 
C)  the auditor should seek removal from office. 
D)  a fee premium can be applied to the current audit.

Question 14

If a public accounting firm is requested by a client of another audit firm to provide an opinion on the application of an accounting principle, the public accounting firm should:

Accepted Answer

A)  refuse to give an opinion. 
B)  inform ASIC. 
C)  advise the existing auditor. 
D)  all of the above 
A)  refuse to give an opinion. 
B)  inform ASIC. 
C)  advise the existing auditor. 
D)  all of the above

Question 15

In the Code of Ethics for Professional Accountants, the first principle of professional conduct, entitled "Integrity," applies only to members in public practice and not to members who work as accountants in business, government or education.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following statements is NOT correct? Expulsion from CPA Australia or the ICAA for disciplinary reasons:

Accepted Answer

A)  should be seen as a weighty economic sanction. 
B)  should be seen as a weighty social sanction. 
C)  might provide a basis for the Companies Auditors and Liquidators Disciplinary Board to suspend or cancel registration. 
D)  prevents an individual from practising as a public accountant. 
A)  should be seen as a weighty economic sanction. 
B)  should be seen as a weighty social sanction. 
C)  might provide a basis for the Companies Auditors and Liquidators Disciplinary Board to suspend or cancel registration. 
D)  prevents an individual from practising as a public accountant.

Question 17

Corporate governance can be described as:

Accepted Answer

A)  how stakeholders and agencies external to a corporation control or influence those responsible for directing and managing the affairs of the corporation. 
B)  the internal controls of corporations. 
C)  the processes, structures and mechanisms that control and direct corporations. 
D)  provisions of the Corporations Act 2001. 
A)  how stakeholders and agencies external to a corporation control or influence those responsible for directing and managing the affairs of the corporation. 
B)  the internal controls of corporations. 
C)  the processes, structures and mechanisms that control and direct corporations. 
D)  provisions of the Corporations Act 2001.

Question 18

An ethical dilemma arises:

Accepted Answer

A)  when a person is faced with a situation that requires a decision about the most appropriate behaviour when there is a range of options available. 
B)  when a person is faced with a situation that requires a decision about the most appropriate behaviour, but they have very few options available. 
C)  when a person is faced with a situation that requires a decision about the least appropriate behaviour, but the available options require a trade- off of interests or ideals. 
D)  when a person is faced with a situation that requires a decision about the most appropriate behaviour, but the available options require a trade- off of interests or ideals. 
A)  when a person is faced with a situation that requires a decision about the most appropriate behaviour when there is a range of options available. 
B)  when a person is faced with a situation that requires a decision about the most appropriate behaviour, but they have very few options available. 
C)  when a person is faced with a situation that requires a decision about the least appropriate behaviour, but the available options require a trade- off of interests or ideals. 
D)  when a person is faced with a situation that requires a decision about the most appropriate behaviour, but the available options require a trade- off of interests or ideals.

Question 19

Corporate failures are signals of failures in audit quality in the conduct of an audit.

Accepted Answer

A) True 
 B)False

Question 20

The audit expectations gap refers to:

Accepted Answer

A)  differences between the views of auditors and the expectations of other stakeholders regarding the appropriate roles and responsibilities of management, and the audit performance. 
B)  differences between what clients expect to pay and what the auditor charges. 
C)  differences between the views of auditors and the expectations of other stakeholders regarding the appropriate roles and responsibilities of auditors, and their performance. 
D)  all of the above 
A)  differences between the views of auditors and the expectations of other stakeholders regarding the appropriate roles and responsibilities of management, and the audit performance. 
B)  differences between what clients expect to pay and what the auditor charges. 
C)  differences between the views of auditors and the expectations of other stakeholders regarding the appropriate roles and responsibilities of auditors, and their performance. 
D)  all of the above

The disadvantage of including general statements in a code of professional ethics is:

APES 110 Code of Professional Conduct considers a material direct financial interest in an audit client to be:

Fees for audit engagements should take into account:

The Code of Ethics for Professional Accountants is issued by the:

Explain the "conceptual approach" referred to in APES110.

The auditor's ultimate defence where conflicts are sufficiently great so as to compromise objectivity is:

ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information requires policies and procedures including:

To preserve audit independence, the review partner must rotate every 5 years.

Subsection 290.176 of the Code of Ethics for Professional Accountants prohibits the provision of which one of the following to an audit client?

According to the profession's ethical standards, an auditor would be considered independent in which one of the following instances?

A public accounting firm should decline an offer to perform management advisory services if:

When audit working papers are viewed by another party as part of a peer review, the permission of the client must be obtained.

When there are substantial unpaid fees outstanding from previous audit work:

If a public accounting firm is requested by a client of another audit firm to provide an opinion on the application of an accounting principle, the public accounting firm should:

In the Code of Ethics for Professional Accountants, the first principle of professional conduct, entitled "Integrity," applies only to members in public practice and not to members who work as accountants in business, government or education.

Which one of the following statements is NOT correct? Expulsion from CPA Australia or the ICAA for disciplinary reasons:

Corporate governance can be described as:

An ethical dilemma arises:

Corporate failures are signals of failures in audit quality in the conduct of an audit.

The audit expectations gap refers to:

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

The disadvantage of including general statements in a code of professional ethics is:

APES 110 Code of Professional Conduct considers a material direct financial interest in an audit client to be:

Fees for audit engagements should take into account:

The Code of Ethics for Professional Accountants is issued by the:

Explain the "conceptual approach" referred to in APES110.

The auditor's ultimate defence where conflicts are sufficiently great so as to compromise objectivity is:

ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information requires policies and procedures including:

To preserve audit independence, the review partner must rotate every 5 years.

Subsection 290.176 of the Code of Ethics for Professional Accountants prohibits the provision of which one of the following to an audit client?

According to the profession's ethical standards, an auditor would be considered independent in which one of the following instances?

A public accounting firm should decline an offer to perform management advisory services if:

When audit working papers are viewed by another party as part of a peer review, the permission of the client must be obtained.

When there are substantial unpaid fees outstanding from previous audit work:

If a public accounting firm is requested by a client of another audit firm to provide an opinion on the application of an accounting principle, the public accounting firm should:

In the Code of Ethics for Professional Accountants, the first principle of professional conduct, entitled "Integrity," applies only to members in public practice and not to members who work as accountants in business, government or education.

Which one of the following statements is NOT correct? Expulsion from CPA Australia or the ICAA for disciplinary reasons:

Corporate governance can be described as:

An ethical dilemma arises:

Corporate failures are signals of failures in audit quality in the conduct of an audit.

The audit expectations gap refers to:

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