Question 1

A subsequent event occurs:

Accepted Answer

A)  before the end of the financial year 
B)  between the client's financial year-end and the date of the auditor's report 
C)  after the audit completes the tests of controls 
D)  after the auditor signs the audit engagement letter 
A)  before the end of the financial year 
B)  between the client's financial year-end and the date of the auditor's report 
C)  after the audit completes the tests of controls 
D)  after the auditor signs the audit engagement letter B

Question 2

Under the going concern assumption:

Accepted Answer

A)  an entity is viewed as not likely to continue in operation for the foreseeable future. 
B)  an entity's assets and liabilities are recorded at liquidation values. 
C)  an entity is viewed as continuing in business for the foreseeable future. 
D)  an entity is considered to be a separate legal entity from its owners. 
A)  an entity is viewed as not likely to continue in operation for the foreseeable future. 
B)  an entity's assets and liabilities are recorded at liquidation values. 
C)  an entity is viewed as continuing in business for the foreseeable future. 
D)  an entity is considered to be a separate legal entity from its owners. C

Question 3

Under section 311 of the Corporations Act auditors are required to report any actual or suspected contraventions of the Act to:

Accepted Answer

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

Question 4

A limitation on the scope of the auditor's work could result from an inability to perform procedures or an imposition by the entity.

Accepted Answer

A) True 
 B)False

Question 5

The auditor's report will not require a modified opinion where:

Accepted Answer

A)  there is a disagreement with those charged with governance. 
B)  a limitation of scope of the engagement exists. 
C)  a significant uncertainty exists. 
D)  the financial report is true and fair. 
A)  there is a disagreement with those charged with governance. 
B)  a limitation of scope of the engagement exists. 
C)  a significant uncertainty exists. 
D)  the financial report is true and fair.

Question 6

Subsequent events procedures are normally performed through to and including the date of the auditor's report.

Accepted Answer

A) True 
 B)False

Question 7

A type 1 subsequent event provides evidence with respect to conditions that developed subsequent to year-end.

Accepted Answer

A) True 
 B)False

Question 8

Demand for forensic accounting has grown following the collapses of Enron and Worldcom. Explain the important characteristics of forensic accountants and the main techniques they use to investigate fraud.

Accepted Answer

Forensic accountants play a crucial role

Question 9

An unqualified audit report with an emphasis of matter should be issued if a subsequent event has occurred that has resulted in a new auditor's report being prepared on a revised financial report.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following statements is regarding a type 1 subsequent event?

Accepted Answer

A)  they are events that do not result in changes to amounts in the financial report. 
B)  they occur before the end of the client's financial year. 
C)  they may be of such significance as to require disclosure in the financial report. 
D)  the financial report is adjusted for any material changes in estimates from these types of events. 
A)  they are events that do not result in changes to amounts in the financial report. 
B)  they occur before the end of the client's financial year. 
C)  they may be of such significance as to require disclosure in the financial report. 
D)  the financial report is adjusted for any material changes in estimates from these types of events.

Question 11

If the auditor is not able to obtain sufficient appropriate audit evidence, the appropriate audit opinion will either be:

Accepted Answer

A)  a qualified opinion or an unqualified opinion. 
B)  a disclaimer of opinion or an emphasis of matter. 
C)  a qualified opinion or disclaimer of opinion. 
D)  an emphasis of matter or a qualified opinion. 
A)  a qualified opinion or an unqualified opinion. 
B)  a disclaimer of opinion or an emphasis of matter. 
C)  a qualified opinion or disclaimer of opinion. 
D)  an emphasis of matter or a qualified opinion.

Question 12

Which of the following factors is not relevant when management is assessing the going concern assumption?

Accepted Answer

A)  Whether the auditor specialises in the client's industry 
B)  The time into the future that an event is likely to take place 
C)  The nature and condition of the entity's business 
D)  The size and complexity of the entity 
A)  Whether the auditor specialises in the client's industry 
B)  The time into the future that an event is likely to take place 
C)  The nature and condition of the entity's business 
D)  The size and complexity of the entity

Question 13

Procedures used by an auditor when conducting a subsequent events review include:

Accepted Answer

A)  assessing continued compliance with borrowing limits and loan covenants. 
B)  enquiring of those charged with governance as to whether any subsequent events have occurred that may affect the financial report. 
C)  reading minutes of the meetings of the board of directors. 
D)  All of the above 
A)  assessing continued compliance with borrowing limits and loan covenants. 
B)  enquiring of those charged with governance as to whether any subsequent events have occurred that may affect the financial report. 
C)  reading minutes of the meetings of the board of directors. 
D)  All of the above

Question 14

Generally, the further into the future an event is likely to take place, the greater the uncertainty surrounding the event.

Accepted Answer

A) True 
 B)False

Question 15

A limitation on the scope of the auditor's work may result from:

Accepted Answer

A)  damage to accounting records. 
B)  lack of access to key personnel. 
C)  absence of adequate accounting records. 
D)  all of the above. 
A)  damage to accounting records. 
B)  lack of access to key personnel. 
C)  absence of adequate accounting records. 
D)  all of the above.

Question 16

What are examples of matters of governance interest that the auditor may wish to discuss with those charged with governance?

Accepted Answer

Matters of governance interest that the

Question 17

Under section 311 of the Corporations Act, auditors are required to report to ASIC any actual or suspected contraventions of the Act within 28 days of an event.

Accepted Answer

A) True 
 B)False

Question 18

Contraventions of the Corporations Act that are considered significant include:

Accepted Answer

A)  fraud by officers or employees of the entity. 
B)  breaches of accounting standards. 
C)  insolvent trading. 
D)  All of the above 
A)  fraud by officers or employees of the entity. 
B)  breaches of accounting standards. 
C)  insolvent trading. 
D)  All of the above

Question 19

An error is an intentional misstatement in the client's financial report.

Accepted Answer

A) True 
 B)False

Question 20

The final phase of an audit is to assess all of the audit evidence obtained and determine whether it is sufficient and appropriate.

Accepted Answer

A) True 
 B)False

A subsequent event occurs:

Under the going concern assumption:

Under section 311 of the Corporations Act auditors are required to report any actual or suspected contraventions of the Act to:

A limitation on the scope of the auditor's work could result from an inability to perform procedures or an imposition by the entity.

The auditor's report will not require a modified opinion where:

Subsequent events procedures are normally performed through to and including the date of the auditor's report.

A type 1 subsequent event provides evidence with respect to conditions that developed subsequent to year-end.

Demand for forensic accounting has grown following the collapses of Enron and Worldcom. Explain the important characteristics of forensic accountants and the main techniques they use to investigate fraud.

An unqualified audit report with an emphasis of matter should be issued if a subsequent event has occurred that has resulted in a new auditor's report being prepared on a revised financial report.

Which of the following statements is regarding a type 1 subsequent event?

If the auditor is not able to obtain sufficient appropriate audit evidence, the appropriate audit opinion will either be:

Which of the following factors is not relevant when management is assessing the going concern assumption?

Procedures used by an auditor when conducting a subsequent events review include:

Generally, the further into the future an event is likely to take place, the greater the uncertainty surrounding the event.

A limitation on the scope of the auditor's work may result from:

What are examples of matters of governance interest that the auditor may wish to discuss with those charged with governance?

Under section 311 of the Corporations Act, auditors are required to report to ASIC any actual or suspected contraventions of the Act within 28 days of an event.

Contraventions of the Corporations Act that are considered significant include:

An error is an intentional misstatement in the client's financial report.

The final phase of an audit is to assess all of the audit evidence obtained and determine whether it is sufficient and appropriate.

Introduction and Overview of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Risk Assessment 1

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

Filters

Exam 12: Completing and Reporting on the Audit

A subsequent event occurs:

Under the going concern assumption:

Under section 311 of the Corporations Act auditors are required to report any actual or suspected contraventions of the Act to:

A limitation on the scope of the auditor's work could result from an inability to perform procedures or an imposition by the entity.

The auditor's report will not require a modified opinion where:

Subsequent events procedures are normally performed through to and including the date of the auditor's report.

A type 1 subsequent event provides evidence with respect to conditions that developed subsequent to year-end.

Demand for forensic accounting has grown following the collapses of Enron and Worldcom. Explain the important characteristics of forensic accountants and the main techniques they use to investigate fraud.

An unqualified audit report with an emphasis of matter should be issued if a subsequent event has occurred that has resulted in a new auditor's report being prepared on a revised financial report.

Which of the following statements is regarding a type 1 subsequent event?

If the auditor is not able to obtain sufficient appropriate audit evidence, the appropriate audit opinion will either be:

Which of the following factors is not relevant when management is assessing the going concern assumption?

Procedures used by an auditor when conducting a subsequent events review include:

Generally, the further into the future an event is likely to take place, the greater the uncertainty surrounding the event.

A limitation on the scope of the auditor's work may result from:

What are examples of matters of governance interest that the auditor may wish to discuss with those charged with governance?

Under section 311 of the Corporations Act, auditors are required to report to ASIC any actual or suspected contraventions of the Act within 28 days of an event.

Contraventions of the Corporations Act that are considered significant include:

An error is an intentional misstatement in the client's financial report.

The final phase of an audit is to assess all of the audit evidence obtained and determine whether it is sufficient and appropriate.

Introduction and Overview of Audit and Assurance

Ethics, Legal Liability and Client Acceptance

Risk Assessment 1

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

Filters