Exam 17: Advanced Topics Concerning Complex Auditing Judgements

One difficulty that commonly arises in making materiality judgements is that the auditor's materiality judgements at the planning stage may differ from those at the evidence evaluation stage because the auditor may learn certain facts during the audit that cause a change in judgement.

Different materiality levels may be established for different locations and the aggregate of the location materiality levels could equal or exceed overall planning materiality.

Areas where subjective judgements are made are almost always:

Which of the following is not a common benchmark for materiality?

ASA 320 Materiality In Planning and Performing An Audit provides the professional accounting bodies with basic guidance on materiality judgements.

The Global Reporting Initiative, which issued the G3 Guidelines in 2006, is examining the issue of materiality as it applies to:

If management resists making the adjustment, then, by definition, it can be argued that it is:

It is a mandate for all companies listed with the Australian Securities Exchange to maintain an internal audit function.

The AASB has set a hierarchy of inputs to consider in assessing fair value. Which of the following relates to Level 1?

According to the AASB 138 Intangible Assets, intangible assets that are not amortised will be tested for impairment at least annually by comparing the fair values of those assets with their recorded amounts.

Which of the following accounts would be subject to allowance for non-collectibility?

When the auditor detects an intentional misstatement they should all of the following except:

ASA 640 encourages the external auditor to utilise the work of which of the following?

Considering AASB 139 Financial Instruments: Recognition and Measurement, the cash position of the investee is one of the factors that indicate that an other-than-temporary impairment of a security's value has occurred.

The auditor may also be required to make a judgement as to what the fair value of a Security might be at year end and about contingencies This includes their:

Performance materiality is a materiality level where the auditor believes that the errors below that level would not, even when aggregated with all other misstatements, be material to the financial report.

For the same client, APES 110 prohibits a public accounting firm from providing which of the following services?

A third common problem is determining how to allocate materiality where there are many client locations.

Which of the following is associated with Level 3 in the IASB hierarchy for ascertaining fair value?

The auditor should have gathered systematic evidence that incorporates relevant information about the correctness of the account balance and should be able to defend the veracity of that estimate.