Question 1

When comparing the auditor's responsibility for detecting employee fraud and for detecting errors, the profession has placed the responsibility:

Accepted Answer

A)  equally on discovering either one. 
B)  on the senior auditor for detecting errors and on the manager for detecting employee fraud. 
C)  more on discovering errors than employee fraud. 
D)  more on discovering employee fraud than errors. 
A)  equally on discovering either one. 
B)  on the senior auditor for detecting errors and on the manager for detecting employee fraud. 
C)  more on discovering errors than employee fraud. 
D)  more on discovering employee fraud than errors.

Question 2

Tests of controls are normally performed only on those internal controls the auditor believes have been operating effectively during the period under audit.

Accepted Answer

A) True 
 B)False

Question 3

An audit can be divided into transaction cycles.Identify the cycles and explain the relationships among the cycles.

Accepted Answer

Cycles have no beginning or end except a

Question 4

Tests of details of balances only involve the use of comparisons and relationships to assess the overall reasonableness of account balances.

Accepted Answer

A) True 
 B)False

Question 5

The objective of the ordinary examination by the independent auditor is the expression of an opinion on the:

Accepted Answer

A)  accuracy of the annual report. 
B)  statements of financial position and financial performance. 
C)  fairness of the financial statements. 
D)  accuracy of the financial statements. 
A)  accuracy of the annual report. 
B)  statements of financial position and financial performance. 
C)  fairness of the financial statements. 
D)  accuracy of the financial statements.

Question 6

Discuss three reasons why auditors are responsible for 'reasonable' but not 'absolute' assurance.

Accepted Answer

.Most audit evidence results from testin

Question 7

What is the first step to developing audit objectives?

Accepted Answer

A)  Divide the financial statements into cycles. 
B)  Know general audit objectives for classes of transactions and accounts. 
C)  Understand objectives and responsibilities for the audit. 
D)  Know management assertions about accounts. 
A)  Divide the financial statements into cycles. 
B)  Know general audit objectives for classes of transactions and accounts. 
C)  Understand objectives and responsibilities for the audit. 
D)  Know management assertions about accounts.

Question 8

The effect of a violation of the completeness transaction-related audit objective for cash disbursements transactions would be an overstatement of cash disbursements.

Accepted Answer

A) True 
 B)False

Question 9

To adequately plan the appropriate audit evidence to gather, Australian auditing standards require the auditor to gain an understanding of:

Accepted Answer

A)  the client's procedural manuals. 
B)  the client's organisation charts. 
C)  the client's internal controls. 
D)  all of the above 
A)  the client's procedural manuals. 
B)  the client's organisation charts. 
C)  the client's internal controls. 
D)  all of the above

Question 10

Balance-related audit objectives are usually applied to the ending balance in income statement accounts; transaction-related audit objectives are usually applied to transactions reflected in balance sheet accounts.

Accepted Answer

A) True 
 B)False

Question 11

The auditor has considerable responsibility for notifying users as to whether or not the statements are properly stated.This imposes on the auditor a duty to:

Accepted Answer

A)  provide reasonable assurance that material misstatements will be detected. 
B)  be an insurer of the fairness of the statements. 
C)  be equally responsible with management for the preparation of the financial statements. 
D)  be a guarantor of the fairness of the statements. 
A)  provide reasonable assurance that material misstatements will be detected. 
B)  be an insurer of the fairness of the statements. 
C)  be equally responsible with management for the preparation of the financial statements. 
D)  be a guarantor of the fairness of the statements.

Question 12

What is a common name for fraudulent financial reporting?

Accepted Answer

A)  employee fraud 
B)  theft of assets 
C)  defalcation 
D)  management fraud 
A)  employee fraud 
B)  theft of assets 
C)  defalcation 
D)  management fraud

Question 13

If a long-term note receivable is included on an accounts receivable listing, there is a violation of the:

Accepted Answer

A)  timing objective. 
B)  classification objective. 
C)  completeness objective. 
D)  existence objective. 
A)  timing objective. 
B)  classification objective. 
C)  completeness objective. 
D)  existence objective.

When comparing the auditor's responsibility for detecting employee fraud and for detecting errors, the profession has placed the responsibility:

Tests of controls are normally performed only on those internal controls the auditor believes have been operating effectively during the period under audit.

An audit can be divided into transaction cycles.Identify the cycles and explain the relationships among the cycles.

Tests of details of balances only involve the use of comparisons and relationships to assess the overall reasonableness of account balances.

The objective of the ordinary examination by the independent auditor is the expression of an opinion on the:

Discuss three reasons why auditors are responsible for 'reasonable' but not 'absolute' assurance.

What is the first step to developing audit objectives?

The effect of a violation of the completeness transaction-related audit objective for cash disbursements transactions would be an overstatement of cash disbursements.

To adequately plan the appropriate audit evidence to gather, Australian auditing standards require the auditor to gain an understanding of:

Balance-related audit objectives are usually applied to the ending balance in income statement accounts; transaction-related audit objectives are usually applied to transactions reflected in balance sheet accounts.

The auditor has considerable responsibility for notifying users as to whether or not the statements are properly stated.This imposes on the auditor a duty to:

What is a common name for fraudulent financial reporting?

If a long-term note receivable is included on an accounts receivable listing, there is a violation of the:

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

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 4: Audit responsibilities and objectives

When comparing the auditor's responsibility for detecting employee fraud and for detecting errors, the profession has placed the responsibility:

Tests of controls are normally performed only on those internal controls the auditor believes have been operating effectively during the period under audit.

An audit can be divided into transaction cycles.Identify the cycles and explain the relationships among the cycles.

Tests of details of balances only involve the use of comparisons and relationships to assess the overall reasonableness of account balances.

The objective of the ordinary examination by the independent auditor is the expression of an opinion on the:

Discuss three reasons why auditors are responsible for 'reasonable' but not 'absolute' assurance.

What is the first step to developing audit objectives?

The effect of a violation of the completeness transaction-related audit objective for cash disbursements transactions would be an overstatement of cash disbursements.

To adequately plan the appropriate audit evidence to gather, Australian auditing standards require the auditor to gain an understanding of:

Balance-related audit objectives are usually applied to the ending balance in income statement accounts; transaction-related audit objectives are usually applied to transactions reflected in balance sheet accounts.

The auditor has considerable responsibility for notifying users as to whether or not the statements are properly stated.This imposes on the auditor a duty to:

What is a common name for fraudulent financial reporting?

If a long-term note receivable is included on an accounts receivable listing, there is a violation of the:

Demand for audit and assurance services

Auditors’ legal environment

Audit quality and ethics

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