Question 1

Which of the following statements is correct?

Accepted Answer

A) In compliance audits, an error is considered material if it results in a misstatement in the financial report of more than 10 per cent of net profit. 
B) In compliance audits, control deviations are considered material if the control has not been followed in more than 10 per cent of sample transactions. 
C) In compliance audits, materiality should be determined by reference to the users of the auditor's report and their information needs. 
D) Compliance audits are concerned only with deviations from legislation. 
A) In compliance audits, an error is considered material if it results in a misstatement in the financial report of more than 10 per cent of net profit. 
B) In compliance audits, control deviations are considered material if the control has not been followed in more than 10 per cent of sample transactions. 
C) In compliance audits, materiality should be determined by reference to the users of the auditor's report and their information needs. 
D) Compliance audits are concerned only with deviations from legislation. C

Question 2

Why is it important to establish performance audit criteria?

Accepted Answer

A) They are a basis for communication with management. 
B) They indicate the scope of the performance audit. 
C) They are a basis for developing audit programs and questionnaires. 
D) All of the given answers are correct. 
A) They are a basis for communication with management. 
B) They indicate the scope of the performance audit. 
C) They are a basis for developing audit programs and questionnaires. 
D) All of the given answers are correct. D

Question 3

Why should the public sector performance auditor be concerned with avoiding commenting on government policy?

Accepted Answer

A) Any comment will undermine the public's confidence in the government of the day. 
B) Government policy does not affect the performance of the entity. 
C) The merits of government policy are matters for political debate and for decision by the executive government. 
D) A risk may arise in that the official opposition may use the audit report to criticise the government. 
A) Any comment will undermine the public's confidence in the government of the day. 
B) Government policy does not affect the performance of the entity. 
C) The merits of government policy are matters for political debate and for decision by the executive government. 
D) A risk may arise in that the official opposition may use the audit report to criticise the government. C

Question 4

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

Accepted Answer

A) determine whether the financial report presents the entity's operations fairly. 
B) evaluate the feasibility of attaining the entity's operational objectives. 
C) make recommendations for improving efficiency, effectiveness and economy. 
D) report on the entity's relative success in attaining profit maximisation. 
A) determine whether the financial report presents the entity's operations fairly. 
B) evaluate the feasibility of attaining the entity's operational objectives. 
C) make recommendations for improving efficiency, effectiveness and economy. 
D) report on the entity's relative success in attaining profit maximisation.

Question 5

Governmental auditing includes:

Accepted Answer

A) financial report auditing. 
B) performance auditing. 
C) compliance auditing. 
D) All of the given answers are correct. 
A) financial report auditing. 
B) performance auditing. 
C) compliance auditing. 
D) All of the given answers are correct.

Question 6

Which of the following objectives would not be a primary purpose of a performance audit?

Accepted Answer

A) A means of assurance that internal controls are functioning as planned. 
B) A measure of management performance in meeting organisation goals. 
C) Providing the results of internal examinations of financial and accounting matters to a company's top-level management. 
D) An aid to the external auditor who is conducting the examination of the financial report. 
A) A means of assurance that internal controls are functioning as planned. 
B) A measure of management performance in meeting organisation goals. 
C) Providing the results of internal examinations of financial and accounting matters to a company's top-level management. 
D) An aid to the external auditor who is conducting the examination of the financial report.

Question 7

In reporting performance audit findings, why does an auditor evaluate evidence against criteria?

Accepted Answer

A) To ensure reasonable criteria have been established. 
B) To develop conclusions relative to the audit objectives. 
C) To develop the audit scope. 
D) To determine risk. 
A) To ensure reasonable criteria have been established. 
B) To develop conclusions relative to the audit objectives. 
C) To develop the audit scope. 
D) To determine risk.

Question 8

Which of the following examples is a compliance audit in relation to a government department?

Accepted Answer

A) Reporting to the minister on the tendering process for the construction of the department's new office block. 
B) Reporting on the department's financial report to be presented to Parliament. 
C) Reporting to the minister as to whether the department has met the objectives set out in its mission statement. 
D) Reporting to the minister as to whether members of the department have followed the government travel guidelines. 
A) Reporting to the minister on the tendering process for the construction of the department's new office block. 
B) Reporting on the department's financial report to be presented to Parliament. 
C) Reporting to the minister as to whether the department has met the objectives set out in its mission statement. 
D) Reporting to the minister as to whether members of the department have followed the government travel guidelines.

Question 9

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 delegates 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 delegates of the Auditor-General. 
C) The Auditor-General is appointed by the government. 
D) None of the options listed here are correct.

Question 10

What is the main concern of performance auditing?

Accepted Answer

A) Compliance with relevant laws and regulations. 
B) Probity. 
C) Financial report attest auditing. 
D) Efficiency, economy and effectiveness. 
A) Compliance with relevant laws and regulations. 
B) Probity. 
C) Financial report attest auditing. 
D) Efficiency, economy and effectiveness.

Question 11

What problem arises if the relationship between cause and effect is not determined in a performance audit?

Accepted Answer

A) The impact on the financial report cannot be determined. 
B) The audit cannot proceed. 
C) The criteria cannot be established. 
D) A recommendation cannot be made to address the cause of the problem. 
A) The impact on the financial report cannot be determined. 
B) The audit cannot proceed. 
C) The criteria cannot be established. 
D) A recommendation cannot be made to address the cause of the problem.

Question 12

Peer reviews of public sector audit offices are normally directed by:

Accepted Answer

A) the Prime Minister/Premier. 
B) the Treasurer/Minister for Finance. 
C) public accounts committees. 
D) specific legislative requirements. 
A) the Prime Minister/Premier. 
B) the Treasurer/Minister for Finance. 
C) public accounts committees. 
D) specific legislative requirements.

Question 13

Governmental auditing often extends beyond examinations leading to the expression of an opinion on the fairness of financial presentation, and includes audits of efficiency and effectiveness, and:

Accepted Answer

A) internal control. 
B) evaluation. 
C) accuracy. 
D) compliance. 
A) internal control. 
B) evaluation. 
C) accuracy. 
D) compliance.

Question 14

Which of the following is an example of improved effectiveness?

Accepted Answer

A) Greater outputs from the same inputs. 
B) Rationalisation of facilities. 
C) Introduction of charges where none previously existed. 
D) An increase in the percentage of streets rated as having a satisfactory level of cleanliness and appearance in terms of a city's street maintenance program. 
A) Greater outputs from the same inputs. 
B) Rationalisation of facilities. 
C) Introduction of charges where none previously existed. 
D) An increase in the percentage of streets rated as having a satisfactory level of cleanliness and appearance in terms of a city's street maintenance program.

Question 15

The Auditor-General is appointed by:

Accepted Answer

A) the Governor-General. 
B) the Parliament. 
C) the Public Service Board. 
D) the Minister of Finance. 
A) the Governor-General. 
B) the Parliament. 
C) the Public Service Board. 
D) the Minister of Finance.

Question 16

The Auditor-General is ultimately responsible to:

Accepted Answer

A) the Public Accounts Committee. 
B) the Parliament. 
C) the Public Service Board. 
D) the Minister of Finance. 
A) the Public Accounts Committee. 
B) the Parliament. 
C) the Public Service Board. 
D) the Minister of Finance.

Question 17

A determination of cost savings is most likely to be an objective of a:

Accepted Answer

A) regularity audit. 
B) compliance audit. 
C) performance audit. 
D) financial audit. 
A) regularity audit. 
B) compliance audit. 
C) performance audit. 
D) financial audit.

Question 18

Which of the following statements concerning AASB 1052 'Disaggregated Disclosures' is not correct?

Accepted Answer

A) AASB 1052 requires that where local governments are required to use fund accounting for grant purposes, they do not need to prepare general-purpose financial reports. 
B) AASB 1052 deems each local government to be a reporting entity. 
C) AASB 1052 requires local governments to use accrual accounting. 
D) AASB 1052 requires each local government to prepare general-purpose financial reports. 
A) AASB 1052 requires that where local governments are required to use fund accounting for grant purposes, they do not need to prepare general-purpose financial reports. 
B) AASB 1052 deems each local government to be a reporting entity. 
C) AASB 1052 requires local governments to use accrual accounting. 
D) AASB 1052 requires each local government to prepare general-purpose financial reports.

Question 19

Government activities may be carried out through:

Accepted Answer

A) government departments. 
B) statutory authorities. 
C) companies. 
D) All of the given answers are correct. 
A) government departments. 
B) statutory authorities. 
C) companies. 
D) All of the given answers are correct.

Question 20

Public sector entities are required to prepare financial reports based on:

Accepted Answer

A) cash accounting. 
B) accrual accounting. 
C) fund accounting. 
D) All of the given answers are correct. 
A) cash accounting. 
B) accrual accounting. 
C) fund accounting. 
D) All of the given answers are correct.

Which of the following statements is correct?

Why is it important to establish performance audit criteria?

Why should the public sector performance auditor be concerned with avoiding commenting on government policy?

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

Governmental auditing includes:

Which of the following objectives would not be a primary purpose of a performance audit?

In reporting performance audit findings, why does an auditor evaluate evidence against criteria?

Which of the following examples is a compliance audit in relation to a government department?

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

What is the main concern of performance auditing?

What problem arises if the relationship between cause and effect is not determined in a performance audit?

Peer reviews of public sector audit offices are normally directed by:

Governmental auditing often extends beyond examinations leading to the expression of an opinion on the fairness of financial presentation, and includes audits of efficiency and effectiveness, and:

Which of the following is an example of improved effectiveness?

The Auditor-General is appointed by:

The Auditor-General is ultimately responsible to:

A determination of cost savings is most likely to be an objective of a:

Which of the following statements concerning AASB 1052 'Disaggregated Disclosures' is not correct?

Government activities may be carried out through:

Public sector entities are required to prepare financial reports based on:

Assurance and Auditing: An Overview

Audit Regulation, Structure of the Profession and Auditors Liability

Ethics, Independence and Corporate Governance

Overview of Elements of the Financial Report Audit Process

Planning, Understanding the Entity and Assessing Business Risk

Assessing Inherent Risk, and Other Specific Business Risks

Understanding and Assessing Internal Control

Tests of Controls

Substantive Tests of Transactions and Balances

Completion and Review

The Auditors Reporting Obligations

Other Assurance Services and Advanced Topics

Internal Auditing

Filters

Exam 15: Audit and Assurance Services in the Public Sector

Which of the following statements is correct?

Why is it important to establish performance audit criteria?

Why should the public sector performance auditor be concerned with avoiding commenting on government policy?

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

Governmental auditing includes:

Which of the following objectives would not be a primary purpose of a performance audit?

In reporting performance audit findings, why does an auditor evaluate evidence against criteria?

Which of the following examples is a compliance audit in relation to a government department?

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

What is the main concern of performance auditing?

What problem arises if the relationship between cause and effect is not determined in a performance audit?

Peer reviews of public sector audit offices are normally directed by:

Governmental auditing often extends beyond examinations leading to the expression of an opinion on the fairness of financial presentation, and includes audits of efficiency and effectiveness, and:

Which of the following is an example of improved effectiveness?

The Auditor-General is appointed by:

The Auditor-General is ultimately responsible to:

A determination of cost savings is most likely to be an objective of a:

Which of the following statements concerning AASB 1052 'Disaggregated Disclosures' is not correct?

Government activities may be carried out through:

Public sector entities are required to prepare financial reports based on:

Assurance and Auditing: An Overview

Audit Regulation, Structure of the Profession and Auditors Liability

Ethics, Independence and Corporate Governance

Overview of Elements of the Financial Report Audit Process

Planning, Understanding the Entity and Assessing Business Risk

Assessing Inherent Risk, and Other Specific Business Risks

Understanding and Assessing Internal Control

Tests of Controls

Substantive Tests of Transactions and Balances

Completion and Review

The Auditors Reporting Obligations

Other Assurance Services and Advanced Topics

Internal Auditing

Filters