Question 1

An assurance engagement can be defined as

Accepted Answer

A) an engagement of an expert to direct the entity on subject matter. 
B) an engagement to enhance the reliability of the subject matter. 
C) an audit to determine the validity of the subject matter. 
D) an engagement to determine a true and fair view of the entities course of actions. 
A) an engagement of an expert to direct the entity on subject matter. 
B) an engagement to enhance the reliability of the subject matter. 
C) an audit to determine the validity of the subject matter. 
D) an engagement to determine a true and fair view of the entities course of actions. B

Question 2

An example of an unmodified audit opinion is:

Accepted Answer

A) unqualified audit opinion with an emphasis of matter. 
B) adverse audit opinion. 
C) qualified audit opinion. 
D) none of the above. 
A) unqualified audit opinion with an emphasis of matter. 
B) adverse audit opinion. 
C) qualified audit opinion. 
D) none of the above. A

Question 3

In a review engagement,which of the following is least likely to occur during the engagement?

Accepted Answer

A) enquiries with management and other personnel. 
B) analytical procedures. 
C) review of the internal controls of the entity. 
D) substantive audit procedures. 
A) enquiries with management and other personnel. 
B) analytical procedures. 
C) review of the internal controls of the entity. 
D) substantive audit procedures. D

Question 4

Professional scepticism does not involve:

Accepted Answer

A) being suspicious when evidence contradicts documents held by their client or enquiries made of client personnel. 
B) seeking independent evidence to corroborate information provided by their client. 
C) the professional requirement that all management representations be substantiated with supporting documentation. 
D) none of the above. 
A) being suspicious when evidence contradicts documents held by their client or enquiries made of client personnel. 
B) seeking independent evidence to corroborate information provided by their client. 
C) the professional requirement that all management representations be substantiated with supporting documentation. 
D) none of the above.

Question 5

Insurance hypothesis tells us that:

Accepted Answer

A) investors can insure themselves against loss by investing in a diverse investment portfolio should an individual investment fail. 
B) investors will demand that financial reports be audited as a way of insuring against some of their loss should their investment fail. 
C) the entity can take out insurance to protect itself from such risks as employee or management fraud which can lead to material misstatements in the financial statements. 
D) investors cannot insure themselves against loss when investing in an entity. 
A) investors can insure themselves against loss by investing in a diverse investment portfolio should an individual investment fail. 
B) investors will demand that financial reports be audited as a way of insuring against some of their loss should their investment fail. 
C) the entity can take out insurance to protect itself from such risks as employee or management fraud which can lead to material misstatements in the financial statements. 
D) investors cannot insure themselves against loss when investing in an entity.

Question 6

The nature of audit procedures refers to the reliance on evidence provided by the client and its management.

Accepted Answer

A) True 
 B)False

Question 7

Agency theory can be described as the theory of:

Accepted Answer

A) the relationship between the owner and the management of the business when the owner is not the manager of the business. 
B) when the finance function is outsourced to an outside party,and the auditor is required to audit the outside party's work. 
C) hiring an agency to review the work of the management,in this case it is the auditor. 
D) none of the above. 
A) the relationship between the owner and the management of the business when the owner is not the manager of the business. 
B) when the finance function is outsourced to an outside party,and the auditor is required to audit the outside party's work. 
C) hiring an agency to review the work of the management,in this case it is the auditor. 
D) none of the above.

Question 8

Which of the following regulators do not impact on the audit process?

Accepted Answer

A) Auditing Professional and Ethical Standards Board (APES
B) . 
B) Institute of Public Accountants (IP
A) . 
C) Australian Securities and Investments Commission (ASI
C) . 
D) all of the above have an impact on the audit process. 
A) Auditing Professional and Ethical Standards Board (APES
B) . 
B) Institute of Public Accountants (IP
A) . 
C) Australian Securities and Investments Commission (ASI
C) . 
D) all of the above have an impact on the audit process.

Question 9

Suppliers as a user of the financial statements would least consider which of the following aspects of the financial statements:

Accepted Answer

A) profitability of the entity. 
B) solvency of the entity. 
C) corporate social responsibility of the entity. 
D) return on investment of the entity. 
A) profitability of the entity. 
B) solvency of the entity. 
C) corporate social responsibility of the entity. 
D) return on investment of the entity.

Question 10

Which of the following is not true in relation to comparability?

Accepted Answer

A) able to assess performance of the entity over time and with other entities. 
B) able to identify trends that may influence their perception of how well the entity is doing. 
C) able to evaluate. 
D) all of the above are . 
A) able to assess performance of the entity over time and with other entities. 
B) able to identify trends that may influence their perception of how well the entity is doing. 
C) able to evaluate. 
D) all of the above are .

Question 11

An audit engagement is performed by an Auditor to provide a reasonable assurance that the financial report gives a true and fair view of the business activities for the period.

Accepted Answer

A) True 
 B)False

Question 12

A no assurance engagement is of little use as no assurance is given to the client.

Accepted Answer

A) True 
 B)False

Question 13

A compliance audit involves gathering evidence to ascertain whether the person or entity under review has followed the rules,policies,procedures,laws and regulations with which they must conform.

Accepted Answer

A) True 
 B)False

Question 14

The largest accounting firms in Australia are known collectively as the

Accepted Answer

A) 'Big-6' 
B) 'Big-4' 
C) 'Big-3' 
D) 'Big-5' 
A) 'Big-6' 
B) 'Big-4' 
C) 'Big-3' 
D) 'Big-5'

Question 15

The objective of the Financial Reporting Council does not include:

Accepted Answer

A) to monitor and report regularly on matters concerning auditor independence. 
B) to oversee the process used for setting accounting and auditing standards. 
C) all of the above are included in the objectives of the Financial Reporting Council. 
D) to be involved in the technical issues around the standard-setting process. 
A) to monitor and report regularly on matters concerning auditor independence. 
B) to oversee the process used for setting accounting and auditing standards. 
C) all of the above are included in the objectives of the Financial Reporting Council. 
D) to be involved in the technical issues around the standard-setting process.

Question 16

A reasonable level of assurance is the highest level of assurance that an auditor can provide.

Accepted Answer

A) True 
 B)False

Question 17

The Companies and Liquidators Disciplinary Board can respond to applications made by:

Accepted Answer

A) the Australian Securities and Investments Commission (ASI
C) or the Australian Prudential Regulation Authority (APR
A) . 
B) the Australian Prudential Regulation Authority (APR
A) . 
C) the Australian Securities and Investments Commission (ASI
C) . 
D) the general public. 
A) the Australian Securities and Investments Commission (ASI
C) or the Australian Prudential Regulation Authority (APR
A) . 
B) the Australian Prudential Regulation Authority (APR
A) . 
C) the Australian Securities and Investments Commission (ASI
C) . 
D) the general public.

Question 18

How is the expectation gap caused and how can the effects expectation gap be reduced?

Accepted Answer

In particular,the gap is caused by unrea

Question 19

Which of the following is not a type of opinion?

Accepted Answer

A) modified opinion. 
B) qualified opinion. 
C) disclaimer of opinion. 
D) adverse opinion. 
A) modified opinion. 
B) qualified opinion. 
C) disclaimer of opinion. 
D) adverse opinion.

Question 20

The expectation gap is caused by:

Accepted Answer

A) unrealistic auditor expectations. 
B) unrealistic user expectations. 
C) realistic auditor expectations. 
D) realistic user expectations. 
A) unrealistic auditor expectations. 
B) unrealistic user expectations. 
C) realistic auditor expectations. 
D) realistic user expectations.

An assurance engagement can be defined as

An example of an unmodified audit opinion is:

In a review engagement,which of the following is least likely to occur during the engagement?

Professional scepticism does not involve:

Insurance hypothesis tells us that:

The nature of audit procedures refers to the reliance on evidence provided by the client and its management.

Agency theory can be described as the theory of:

Which of the following regulators do not impact on the audit process?

Suppliers as a user of the financial statements would least consider which of the following aspects of the financial statements:

Which of the following is not true in relation to comparability?

An audit engagement is performed by an Auditor to provide a reasonable assurance that the financial report gives a true and fair view of the business activities for the period.

A no assurance engagement is of little use as no assurance is given to the client.

A compliance audit involves gathering evidence to ascertain whether the person or entity under review has followed the rules,policies,procedures,laws and regulations with which they must conform.

The largest accounting firms in Australia are known collectively as the

The objective of the Financial Reporting Council does not include:

A reasonable level of assurance is the highest level of assurance that an auditor can provide.

The Companies and Liquidators Disciplinary Board can respond to applications made by:

How is the expectation gap caused and how can the effects expectation gap be reduced?

Which of the following is not a type of opinion?

The expectation gap is caused by:

Ethics,legal Liability and Client Acceptance

Risk Assessment I

Risk Assessment II

Audit Evidence

Gaining an Understanding of the Clients System of Internal Controls

Sampling and Overview of the Risk Response Phase of the Audit

Execution of the Audit Testing of Controls

Execution of the Audit Performing Substantive Procedures

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Completing and Reporting on the Audit

Filters

Exam 1: Introduction and Overview of Audit and Assurance

An assurance engagement can be defined as

An example of an unmodified audit opinion is:

In a review engagement,which of the following is least likely to occur during the engagement?

Professional scepticism does not involve:

Insurance hypothesis tells us that:

The nature of audit procedures refers to the reliance on evidence provided by the client and its management.

Agency theory can be described as the theory of:

Which of the following regulators do not impact on the audit process?

Suppliers as a user of the financial statements would least consider which of the following aspects of the financial statements:

Which of the following is not true in relation to comparability?

An audit engagement is performed by an Auditor to provide a reasonable assurance that the financial report gives a true and fair view of the business activities for the period.

A no assurance engagement is of little use as no assurance is given to the client.

A compliance audit involves gathering evidence to ascertain whether the person or entity under review has followed the rules,policies,procedures,laws and regulations with which they must conform.

The largest accounting firms in Australia are known collectively as the

The objective of the Financial Reporting Council does not include:

A reasonable level of assurance is the highest level of assurance that an auditor can provide.

The Companies and Liquidators Disciplinary Board can respond to applications made by:

How is the expectation gap caused and how can the effects expectation gap be reduced?

Which of the following is not a type of opinion?

The expectation gap is caused by:

Ethics,legal Liability and Client Acceptance

Risk Assessment I

Risk Assessment II

Audit Evidence

Gaining an Understanding of the Clients System of Internal Controls

Sampling and Overview of the Risk Response Phase of the Audit

Execution of the Audit Testing of Controls

Execution of the Audit Performing Substantive Procedures

Substantive Testing and Balance Sheet Accounts

Substantive Testing and Income Statement Accounts

Completing and Reporting on the Audit

Filters