Question 1

In pursuing its quality control objectives with respect to acceptance of a client, an audit firm is not likely to:

Accepted Answer

A)  make inquiries of the proposed client's legal adviser. 
B)  review financial reports of the proposed client. 
C)  make inquiries of previous auditors. 
D)  review the personnel practices of the proposed client. 
A)  make inquiries of the proposed client's legal adviser. 
B)  review financial reports of the proposed client. 
C)  make inquiries of previous auditors. 
D)  review the personnel practices of the proposed client. D

Question 2

An auditor who is approached by the ICAA, CPA Australia or IPA to undergo a quality control audit must:

Accepted Answer

A)  provide audit files to the investigators without delay. 
B)  obtain the client's permission to disclose information to the investigators prior to giving them any information. 
C)  co-operate in every way without delay. 
D)  disclose to the investigators any potential quality control problems that the member is aware of. 
A)  provide audit files to the investigators without delay. 
B)  obtain the client's permission to disclose information to the investigators prior to giving them any information. 
C)  co-operate in every way without delay. 
D)  disclose to the investigators any potential quality control problems that the member is aware of. B

Question 3

Which of the following types of companies can only be used by an audit firm with the consent of the National Council of the Institute of Chartered Accountants in Australia?

Accepted Answer

A)  Nominee company. 
B)  Service company. 
C)  Practice company. 
D)  All of the given answers are correct. 
A)  Nominee company. 
B)  Service company. 
C)  Practice company. 
D)  All of the given answers are correct. C

Question 4

Which of the following bodies monitors the operation of the Auditing and Assurance Standards Board?

Accepted Answer

A)  Financial Reporting Council. 
B)  Companies Auditors and Liquidators Disciplinary Board. 
C)  Australian Securities Exchange. 
D)  All of the given answers are correct. 
A)  Financial Reporting Council. 
B)  Companies Auditors and Liquidators Disciplinary Board. 
C)  Australian Securities Exchange. 
D)  All of the given answers are correct.

Question 5

A basic objective of an audit firm is to provide professional services to conform with professional standards.Reasonable assurance of achieving this basic objective is provided through:

Accepted Answer

A)  continuing professional education. 
B)  a system of quality control. 
C)  compliance with ASX listing requirements. 
D)  a system of peer review. 
A)  continuing professional education. 
B)  a system of quality control. 
C)  compliance with ASX listing requirements. 
D)  a system of peer review.

Question 6

Which of the following statements is correct?

Accepted Answer

A)  ASIC is a member of the International Forum of Independent Audit Regulators. 
B)  International auditing standards are mandatory for all auditors. 
C)  The FRC is a member of IFAC. 
D)  Membership of the International Auditing and Assurance Standards Board is restricted to members of the Forum of Firms. 
A)  ASIC is a member of the International Forum of Independent Audit Regulators. 
B)  International auditing standards are mandatory for all auditors. 
C)  The FRC is a member of IFAC. 
D)  Membership of the International Auditing and Assurance Standards Board is restricted to members of the Forum of Firms.

Question 7

The mandatory continuing professional education (CPE) requirement for members of The Institute of Chartered Accountants in Australia is:

Accepted Answer

A)  120 CPE hours every year. 
B)  120 CPE hours every three years. 
C)  60 CPE hours every three years. 
D)  60 CPE hours every year. 
A)  120 CPE hours every year. 
B)  120 CPE hours every three years. 
C)  60 CPE hours every three years. 
D)  60 CPE hours every year.

Question 8

Which of the following statements best explains why the auditing profession has found it essential to promulgate ethical standards and to establish means for ensuring their observance?

Accepted Answer

A)  Ethical standards that emphasise excellence in performance over material rewards establish a reputation for competence and character. 
B)  Vigorous enforcement of an established code of ethics is the best way to prevent unscrupulous acts. 
C)  A distinguishing mark of a profession is its acceptance of responsibility to the public. 
D)  A requirement for a profession is to establish ethical standards that stress primarily a responsibility to clients and colleagues. 
A)  Ethical standards that emphasise excellence in performance over material rewards establish a reputation for competence and character. 
B)  Vigorous enforcement of an established code of ethics is the best way to prevent unscrupulous acts. 
C)  A distinguishing mark of a profession is its acceptance of responsibility to the public. 
D)  A requirement for a profession is to establish ethical standards that stress primarily a responsibility to clients and colleagues.

Question 9

A firm of independent auditors must establish and follow explicit quality control policies and procedures because these standards:

Accepted Answer

A)  are necessary to meet increasing requirements of auditors' liability insurers. 
B)  give reasonable assurance that the firm as a whole will conform to the auditing standards. 
C)  include formal filing of records of such policies and procedures. 
D)  are required by ASIC for auditors of all entities. 
A)  are necessary to meet increasing requirements of auditors' liability insurers. 
B)  give reasonable assurance that the firm as a whole will conform to the auditing standards. 
C)  include formal filing of records of such policies and procedures. 
D)  are required by ASIC for auditors of all entities.

Question 10

With respect to the quality control element concerning hiring, which policy will provide reasonable assurance that those employed possess the appropriate characteristics to enable them to work competently?

Accepted Answer

A)  Establish qualifications and guidelines for evaluating potential hirees at each professional level. 
B)  Establish guidelines and requirements for the firm's professional development program and communicate them to personnel. 
C)  Establish qualifications deemed necessary for the various levels of responsibility. 
D)  Assign responsibility for making advancement decisions. 
A)  Establish qualifications and guidelines for evaluating potential hirees at each professional level. 
B)  Establish guidelines and requirements for the firm's professional development program and communicate them to personnel. 
C)  Establish qualifications deemed necessary for the various levels of responsibility. 
D)  Assign responsibility for making advancement decisions.

Question 11

Which of the following statements concerning auditing in the public sector is correct?

Accepted Answer

A)  The Auditor-General only conducts financial report audits in the public sector. 
B)  Private sector auditors may conduct audits in the public sector as a delegate of the Auditor-General. 
C)  The Auditor-General is appointed by the government. 
D)  None of the options listed here are correct. 
A)  The Auditor-General only conducts financial report audits in the public sector. 
B)  Private sector auditors may conduct audits in the public sector as a delegate of the Auditor-General. 
C)  The Auditor-General is appointed by the government. 
D)  None of the options listed here are correct.

Question 12

The Australian auditing standards issued by the Australian Auditing and Assurance Standards Board (AUASB) are intended to be applied to:

Accepted Answer

A)  all audit, review, assurance and related engagements conducted by external firms. 
B)  all audits of entities listed on the Australian Securities Exchange. 
C)  all audits of companies incorporated under the Corporations Act 2001. 
D)  all audit, review, assurance and related engagements where the entity has more than five shareholders. 
A)  all audit, review, assurance and related engagements conducted by external firms. 
B)  all audits of entities listed on the Australian Securities Exchange. 
C)  all audits of companies incorporated under the Corporations Act 2001. 
D)  all audit, review, assurance and related engagements where the entity has more than five shareholders.

Question 13

In pursuing the audit firm's quality control objectives, the firm may maintain records indicating which partners or employees of the firm were previously employed by the firm's clients. Which quality control objective would this
Be most likely to satisfy?

Accepted Answer

A)  Professional relationship. 
B)  Supervision. 
C)  Independence. 
D)  Advancement. 
A)  Professional relationship. 
B)  Supervision. 
C)  Independence. 
D)  Advancement.

Question 14

The objective of quality control dictates that a public accounting firm should establish policies and procedures for professional development which provide reasonable assurance that all entry-level personnel:

Accepted Answer

A)  prepare working papers that are standardised in form and content. 
B)  have the knowledge required to enable them to fulfil responsibilities assigned. 
C)  advance within the organisation. 
D)  develop specialties in specific areas of public accounting. 
A)  prepare working papers that are standardised in form and content. 
B)  have the knowledge required to enable them to fulfil responsibilities assigned. 
C)  advance within the organisation. 
D)  develop specialties in specific areas of public accounting.

Question 15

The primary purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to:

Accepted Answer

A)  enable the audit firm to attest to the reliability of the client. 
B)  satisfy the audit firm's duty to the public concerning the acceptance of new clients. 
C)  minimise the likelihood of association with clients whose management lacks integrity. 
D)  anticipate before performing any fieldwork whether an unmodified opinion can be expressed. 
A)  enable the audit firm to attest to the reliability of the client. 
B)  satisfy the audit firm's duty to the public concerning the acceptance of new clients. 
C)  minimise the likelihood of association with clients whose management lacks integrity. 
D)  anticipate before performing any fieldwork whether an unmodified opinion can be expressed.

Question 16

Which of the following bodies monitors the operation of the Australian Accounting Standards Board?

Accepted Answer

A)  Australian Securities Exchange. 
B)  Financial Reporting Council. 
C)  Australian Securities and Investments Commission. 
D)  Auditing and Assurance Standards Board. 
A)  Australian Securities Exchange. 
B)  Financial Reporting Council. 
C)  Australian Securities and Investments Commission. 
D)  Auditing and Assurance Standards Board.

Question 17

Which of the following bodies is able to impose penalties on auditors who have failed to carry out their duties properly?

Accepted Answer

A)  Financial Reporting Council. 
B)  Companies Auditors and Liquidators Disciplinary Board. 
C)  Auditing and Assurance Standards Board. 
D)  All of the options listed here are correct. 
A)  Financial Reporting Council. 
B)  Companies Auditors and Liquidators Disciplinary Board. 
C)  Auditing and Assurance Standards Board. 
D)  All of the options listed here are correct.

In pursuing its quality control objectives with respect to acceptance of a client, an audit firm is not likely to:

An auditor who is approached by the ICAA, CPA Australia or IPA to undergo a quality control audit must:

Which of the following types of companies can only be used by an audit firm with the consent of the National Council of the Institute of Chartered Accountants in Australia?

Which of the following bodies monitors the operation of the Auditing and Assurance Standards Board?

A basic objective of an audit firm is to provide professional services to conform with professional standards.Reasonable assurance of achieving this basic objective is provided through:

Which of the following statements is correct?

The mandatory continuing professional education (CPE) requirement for members of The Institute of Chartered Accountants in Australia is:

Which of the following statements best explains why the auditing profession has found it essential to promulgate ethical standards and to establish means for ensuring their observance?

A firm of independent auditors must establish and follow explicit quality control policies and procedures because these standards:

With respect to the quality control element concerning hiring, which policy will provide reasonable assurance that those employed possess the appropriate characteristics to enable them to work competently?

Which of the following statements concerning auditing in the public sector is correct?

The Australian auditing standards issued by the Australian Auditing and Assurance Standards Board (AUASB) are intended to be applied to:

In pursuing the audit firm's quality control objectives, the firm may maintain records indicating which partners or employees of the firm were previously employed by the firm's clients. Which quality control objective would this Be most likely to satisfy?

The objective of quality control dictates that a public accounting firm should establish policies and procedures for professional development which provide reasonable assurance that all entry-level personnel:

The primary purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to:

Which of the following bodies monitors the operation of the Australian Accounting Standards Board?

Which of the following bodies is able to impose penalties on auditors who have failed to carry out their duties properly?

Assurance and Auditing: An Overview

Ethics, Independence and Corporate Governance

The Legal Liability of Auditors Part Two: Planning and Risk

Overview of Elements of the Financial Report Audit Process

Planning, Understanding the Entity and Evaluating Business Risk

Assessing Specific Business Risk

Understanding and Assessing Internal Control Part Three: Tests of Control and Tests of Details

Tests of Controls

Substantive Tests of Transactions and Balances

Audit Sampling Part Four: Completion and Communication

Completion and Review

The Auditors Reporting Obligations Part Five: Other Assurance Services

Internal Auditing

Auditing and Assurance Services in the Public Sector

Other Assurance Services and Advanced Topics

Filters

Exam 2: The Structure of the Profession

In pursuing its quality control objectives with respect to acceptance of a client, an audit firm is not likely to:

An auditor who is approached by the ICAA, CPA Australia or IPA to undergo a quality control audit must:

Which of the following types of companies can only be used by an audit firm with the consent of the National Council of the Institute of Chartered Accountants in Australia?

Which of the following bodies monitors the operation of the Auditing and Assurance Standards Board?

A basic objective of an audit firm is to provide professional services to conform with professional standards.Reasonable assurance of achieving this basic objective is provided through:

Which of the following statements is correct?

The mandatory continuing professional education (CPE) requirement for members of The Institute of Chartered Accountants in Australia is:

Which of the following statements best explains why the auditing profession has found it essential to promulgate ethical standards and to establish means for ensuring their observance?

A firm of independent auditors must establish and follow explicit quality control policies and procedures because these standards:

With respect to the quality control element concerning hiring, which policy will provide reasonable assurance that those employed possess the appropriate characteristics to enable them to work competently?

Which of the following statements concerning auditing in the public sector is correct?

The Australian auditing standards issued by the Australian Auditing and Assurance Standards Board (AUASB) are intended to be applied to:

In pursuing the audit firm's quality control objectives, the firm may maintain records indicating which partners or employees of the firm were previously employed by the firm's clients. Which quality control objective would this Be most likely to satisfy?

The objective of quality control dictates that a public accounting firm should establish policies and procedures for professional development which provide reasonable assurance that all entry-level personnel:

The primary purpose of establishing quality control policies and procedures for deciding whether to accept a new client is to:

Which of the following bodies monitors the operation of the Australian Accounting Standards Board?

Which of the following bodies is able to impose penalties on auditors who have failed to carry out their duties properly?

Assurance and Auditing: An Overview

Ethics, Independence and Corporate Governance

The Legal Liability of Auditors Part Two: Planning and Risk

Overview of Elements of the Financial Report Audit Process

Planning, Understanding the Entity and Evaluating Business Risk

Assessing Specific Business Risk

Understanding and Assessing Internal Control Part Three: Tests of Control and Tests of Details

Tests of Controls

Substantive Tests of Transactions and Balances

Audit Sampling Part Four: Completion and Communication

Completion and Review

The Auditors Reporting Obligations Part Five: Other Assurance Services

Internal Auditing

Auditing and Assurance Services in the Public Sector

Other Assurance Services and Advanced Topics

Filters