Question 1

One consequence of CPA Australia's Quality Assurance Program is likely to be:

Accepted Answer

A)  a reduction in management consulting services provided by public accounting firms. 
B)  a provision of information to practitioners that can enhance service quality. 
C)  an increase in disciplinary actions taken. 
D)  a reluctance by public accounting firms to take on higher risk audit clients. 
A)  a reduction in management consulting services provided by public accounting firms. 
B)  a provision of information to practitioners that can enhance service quality. 
C)  an increase in disciplinary actions taken. 
D)  a reluctance by public accounting firms to take on higher risk audit clients. B

Question 2

Discuss four factors that are likely to significantly reduce information risk in the next five to ten years.

Accepted Answer

Four factors that are likely to significantly reduce information risk in the next five to ten years are:
· technological advances
· more companies will go online, reducing the risk of investors obtaining outdated information
· new accounting and auditing standards, and
· auditors will find more efficient and effective audit techniques.

Question 3

Assurance services are independent professional services that improve the quality of information for decision makers.

Accepted Answer

A) True 
 B)False  True

Question 4

The criteria by which an auditor evaluates the information under audit is the same for every audit.

Accepted Answer

A) True 
 B)False

Question 5

Since 2004 the Corporations Act has provided for the issuance of auditing standards by the Auditing and Assurance Standards Board.

Accepted Answer

A) True 
 B)False

Question 6

Public accounting firms are not allowed to provide bookkeeping services for audit clients.

Accepted Answer

A) True 
 B)False

Question 7

Which one of the following services provides a moderate level of assurance about the client's financial statements?

Accepted Answer

A)  Compliance 
B)  Review 
C)  Audit 
D)  Forecasts and projections 
A)  Compliance 
B)  Review 
C)  Audit 
D)  Forecasts and projections

Question 8

Any service in which the public accounting firm issues a written communication expressing a conclusion with respect to the reliability of a written assertion that is the responsibility of another party is:

Accepted Answer

A)  an accounting and bookkeeping service. 
B)  a tax service. 
C)  an attestation service. 
D)  a management advisory service. 
A)  an accounting and bookkeeping service. 
B)  a tax service. 
C)  an attestation service. 
D)  a management advisory service.

Question 9

The impact of e- commerce on public accountants who perform audits of such entities is that:

Accepted Answer

A)  audit firms now must have information technology experts as partners in audit firms. 
B)  auditors now need to be experts in e- commerce and information technology. 
C)  auditors now need a basic knowledge and understanding of e- commerce and information technology. 
D)  auditors must decline to accept the audit of such entities and leave non- audit organisations to perform these audits. 
A)  audit firms now must have information technology experts as partners in audit firms. 
B)  auditors now need to be experts in e- commerce and information technology. 
C)  auditors now need a basic knowledge and understanding of e- commerce and information technology. 
D)  auditors must decline to accept the audit of such entities and leave non- audit organisations to perform these audits.

Question 10

The criteria used by an external auditor to evaluate published financial statements are known as generally accepted auditing standards.

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following was NOT an objective of the Institute's Quality Review Program?

Accepted Answer

A)  Reduced need for costly peer reviews 
B)  Enhanced client service 
C)  Risk reduction 
D)  Increased returns to accounting firms 
A)  Reduced need for costly peer reviews 
B)  Enhanced client service 
C)  Risk reduction 
D)  Increased returns to accounting firms

Question 12

Which one of the following is NOT required in order to become a registered company auditor with ASIC?

Accepted Answer

A)  Sufficient practical experience 
B)  Membership of ICAA, CPA Australia or another prescribed body 
C)  Evidence that adequate professional indemnity insurance is held 
D)  Satisfying the Commission that the applicant is a fit and proper person to be so registered 
A)  Sufficient practical experience 
B)  Membership of ICAA, CPA Australia or another prescribed body 
C)  Evidence that adequate professional indemnity insurance is held 
D)  Satisfying the Commission that the applicant is a fit and proper person to be so registered

Question 13

Auditors often make and help implement recommendations that improve profitability by:

Accepted Answer

A)  enhancing revenue or reducing costs. 
B)  improving operational controls. 
C)  reducing errors and fraud. 
D)  all of the above 
A)  enhancing revenue or reducing costs. 
B)  improving operational controls. 
C)  reducing errors and fraud. 
D)  all of the above

Question 14

Privately held companies have annual financial statement audits:

Accepted Answer

A)  external users rely on it. 
B)  to obtain financing from banks. 
C)  because they are required to under the Corporations Act. 
D)  all of the above 
A)  external users rely on it. 
B)  to obtain financing from banks. 
C)  because they are required to under the Corporations Act. 
D)  all of the above

Question 15

'Other assurance services' are similar to, yet differ somewhat from, attestation services. When performing 'other assurance services,' the public accountant:

Accepted Answer

A)  is required to issue a written report, and the assurance is about the completeness and sufficiency of information. 
B)  is required to issue a written report, and the assurance is about the reliability and relevance of information. 
C)  is not required to issue a written report, and the assurance is about the completeness and sufficiency of information. 
D)  is not required to issue a written report, and the assurance is about the reliability and relevance of information. 
A)  is required to issue a written report, and the assurance is about the completeness and sufficiency of information. 
B)  is required to issue a written report, and the assurance is about the reliability and relevance of information. 
C)  is not required to issue a written report, and the assurance is about the completeness and sufficiency of information. 
D)  is not required to issue a written report, and the assurance is about the reliability and relevance of information.

Question 16

If an auditor has determined that the client has an excellent internal control structure:

Accepted Answer

A)  the type of evidence required changes, but not the quantity. 
B)  the auditor can conclude that there is reasonable assurance that the financial statements do not contain material misstatements. 
C)  business risk is significantly reduced. 
D)  the amount of audit evidence to be collected might be reduced relative to a situation where the control structure is not adequate. 
A)  the type of evidence required changes, but not the quantity. 
B)  the auditor can conclude that there is reasonable assurance that the financial statements do not contain material misstatements. 
C)  business risk is significantly reduced. 
D)  the amount of audit evidence to be collected might be reduced relative to a situation where the control structure is not adequate.

Question 17

In response to the growing need for assurance resulting from the explosion of business transacted electronically over the Internet, the AICPA created:

Accepted Answer

A)  AICPA WebPartner Assurance Services. 
B)  Internet Reliability Assurance Services. 
C)  Information System Reliability Services. 
D)  Webtrust Assurance Services. 
A)  AICPA WebPartner Assurance Services. 
B)  Internet Reliability Assurance Services. 
C)  Information System Reliability Services. 
D)  Webtrust Assurance Services.

Question 18

Two types of attestation services provided by public accounting firms are audits and reviews. Discuss the similarities and differences between these two types of attestation services. Which type provides the most assurance?

Accepted Answer

Two primary types of attestation service

Question 19

An audit of historical financial statements is a form of:

Accepted Answer

A)  assurance service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with auditing standards. 
B)  attestation service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with auditing standards. 
C)  attestation service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with accounting standards. 
D)  none of the above 
A)  assurance service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with auditing standards. 
B)  attestation service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with auditing standards. 
C)  attestation service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with accounting standards. 
D)  none of the above

Question 20

A typical objective of a performance audit is for the auditor to:

Accepted Answer

A)  determine whether the financial statements fairly present the entity's operations. 
B)  make recommendations for improving operational performance. 
C)  report on the entity's relative success in attaining profit maximisation. 
D)  evaluate the feasibility of attaining the entity's operational objectives. 
A)  determine whether the financial statements fairly present the entity's operations. 
B)  make recommendations for improving operational performance. 
C)  report on the entity's relative success in attaining profit maximisation. 
D)  evaluate the feasibility of attaining the entity's operational objectives.

One consequence of CPA Australia's Quality Assurance Program is likely to be:

Discuss four factors that are likely to significantly reduce information risk in the next five to ten years.

Assurance services are independent professional services that improve the quality of information for decision makers.

The criteria by which an auditor evaluates the information under audit is the same for every audit.

Since 2004 the Corporations Act has provided for the issuance of auditing standards by the Auditing and Assurance Standards Board.

Public accounting firms are not allowed to provide bookkeeping services for audit clients.

Which one of the following services provides a moderate level of assurance about the client's financial statements?

Any service in which the public accounting firm issues a written communication expressing a conclusion with respect to the reliability of a written assertion that is the responsibility of another party is:

The impact of e- commerce on public accountants who perform audits of such entities is that:

The criteria used by an external auditor to evaluate published financial statements are known as generally accepted auditing standards.

Which one of the following was NOT an objective of the Institute's Quality Review Program?

Which one of the following is NOT required in order to become a registered company auditor with ASIC?

Auditors often make and help implement recommendations that improve profitability by:

Privately held companies have annual financial statement audits:

'Other assurance services' are similar to, yet differ somewhat from, attestation services. When performing 'other assurance services,' the public accountant:

If an auditor has determined that the client has an excellent internal control structure:

In response to the growing need for assurance resulting from the explosion of business transacted electronically over the Internet, the AICPA created:

Two types of attestation services provided by public accounting firms are audits and reviews. Discuss the similarities and differences between these two types of attestation services. Which type provides the most assurance?

An audit of historical financial statements is a form of:

A typical objective of a performance audit is for the auditor to:

Auditors Legal Environment

Audit Quality and Ethics

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 1: Demand for Audit and Assurance Services

One consequence of CPA Australia's Quality Assurance Program is likely to be:

Discuss four factors that are likely to significantly reduce information risk in the next five to ten years.

Assurance services are independent professional services that improve the quality of information for decision makers.

The criteria by which an auditor evaluates the information under audit is the same for every audit.

Since 2004 the Corporations Act has provided for the issuance of auditing standards by the Auditing and Assurance Standards Board.

Public accounting firms are not allowed to provide bookkeeping services for audit clients.

Which one of the following services provides a moderate level of assurance about the client's financial statements?

Any service in which the public accounting firm issues a written communication expressing a conclusion with respect to the reliability of a written assertion that is the responsibility of another party is:

The impact of e- commerce on public accountants who perform audits of such entities is that:

The criteria used by an external auditor to evaluate published financial statements are known as generally accepted auditing standards.

Which one of the following was NOT an objective of the Institute's Quality Review Program?

Which one of the following is NOT required in order to become a registered company auditor with ASIC?

Auditors often make and help implement recommendations that improve profitability by:

Privately held companies have annual financial statement audits:

'Other assurance services' are similar to, yet differ somewhat from, attestation services. When performing 'other assurance services,' the public accountant:

If an auditor has determined that the client has an excellent internal control structure:

In response to the growing need for assurance resulting from the explosion of business transacted electronically over the Internet, the AICPA created:

Two types of attestation services provided by public accounting firms are audits and reviews. Discuss the similarities and differences between these two types of attestation services. Which type provides the most assurance?

An audit of historical financial statements is a form of:

A typical objective of a performance audit is for the auditor to:

Auditors Legal Environment

Audit Quality and Ethics

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