Question 1

Remoteness of information is a cause of:

Accepted Answer

A)   information risk.
B)   complex exchange transactions.
C)   rejecting a potential client.
D)   auditing the financial statements. Answer A A

Question 2

What is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria?

Accepted Answer

A)   marketing
B)   accounting
C)   finance
D)   auditing D

Question 3

Which one of the following is more difficult to evaluate objectively?

Accepted Answer

A)   compliance with government regulations
B)   efficiency and effectiveness of operations
C)   presentation of financial statements in accordance with applicable accounting standards
D)   All of the above are equally difficult. B

Question 4

A compilation report:

Accepted Answer

A)   is prepared during a taxation audit.
B)   communicates an auditor's findings to a special user group that commissioned the audit.
C)   is a review of an audit providing a low level of assurance.
D)   provides no assurance to third parties.

Question 5

The criteria used by an external auditor to evaluate published financial statements are known as generally accepted auditing standards.

Accepted Answer

A) True 
 B)False

Question 6

Discuss four factors that are likely to significantly reduce information risk in the next five to ten years.

Accepted Answer

The answer of Discuss four factors that are likely to...

Question 7

To do an audit, the auditor needs information in a verifiable form and some criteria by which to evaluate that information.(A)What information and criteria would an independent public accounting firm use when auditing a company's financial statements? (B)What information and criteria would a taxation auditor use when auditing that same company's tax return? (C)What information and criteria would an internal auditor use when performing a performance audit to evaluate whether the company's computerised payroll processing system is operating efficiently and effectively?

Accepted Answer

The answer of To do an audit, the auditor needs...

Question 8

Assurance services are independent professional services that improve the quality of information for decision makers.

Accepted Answer

A) True 
 B)False

Question 9

Since 2004 the Corporations Act has provided for the issuance of auditing standards by the Auditing and Assurance Standards Board.

Accepted Answer

A) True 
 B)False

Question 10

Discuss the similarities and differences between the roles of accountants and auditors.What additional expertise must an auditor possess beyond that of an accountant?

Accepted Answer

The answer of Discuss the similarities and differences between the...

Question 11

Assessing that a company's policies effectively ensure the company's compliance with environmental standards and laws is:

Accepted Answer

A)   an example of a business performance measurement service.
B)   part of the financial statement audit process.
C)   an example of an assurance service.
D)   part of the internal auditor's responsibilities.

Question 12

Any service in which the public accounting firm issues a written communication expressing a conclusion with respect to the reliability of a written assertion that is the responsibility of another party is:

Accepted Answer

A)   an accounting and bookkeeping service.
B)   a management advisory service.
C)   a tax service.
D)   an attestation service.

Question 13

The primary purpose of a performance audit is to evaluate whether an organisation is complying with its operating procedures and methods.

Accepted Answer

A) True 
 B)False

Question 14

The criteria by which an auditor evaluates the information under audit is the same for every audit.

Accepted Answer

A) True 
 B)False

Question 15

Auditing standards (ASAs):

Accepted Answer

A)   are issued by the AUASB.
B)   establish mandatory requirements.
C)   have the 'force of law' under the Corporations Act 2001.
D)   all of the above

Question 16

Results of compliance audits are typically reported to the Auditor-General.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is NOT employed by the entity being audited?

Accepted Answer

A)   controller
B)   internal auditor
C)   external auditor
D)   CEO

Question 18

Which of the following exists independently from an audit?

Accepted Answer

A)   risk-free interest rate and business risk
B)   information risk and the risk-free interest rate
C)   business risk and information risk
D)   risk-free interest rate and audit risk

Question 19

The primary purpose of a compliance audit is to determine whether the overall financial statements are in compliance with generally accepted accounting principles.

Accepted Answer

A) True 
 B)False

Question 20

Why are the auditing standards referred to as the 'force of law' standards?

Accepted Answer

The answer of Why are the auditing standards referred to...

Exam 1: Demand for audit and assurance services

Remoteness of information is a cause of:

What is the accumulation and evaluation of evidence about information to determine and report on the degree of correspondence between the information and established criteria?

Which one of the following is more difficult to evaluate objectively?

A compilation report:

The criteria used by an external auditor to evaluate published financial statements are known as generally accepted auditing standards.

Discuss four factors that are likely to significantly reduce information risk in the next five to ten years.

Assurance services are independent professional services that improve the quality of information for decision makers.

Since 2004 the Corporations Act has provided for the issuance of auditing standards by the Auditing and Assurance Standards Board.

Discuss the similarities and differences between the roles of accountants and auditors.What additional expertise must an auditor possess beyond that of an accountant?

Assessing that a company's policies effectively ensure the company's compliance with environmental standards and laws is:

Any service in which the public accounting firm issues a written communication expressing a conclusion with respect to the reliability of a written assertion that is the responsibility of another party is:

The primary purpose of a performance audit is to evaluate whether an organisation is complying with its operating procedures and methods.

The criteria by which an auditor evaluates the information under audit is the same for every audit.

Auditing standards (ASAs) :

Results of compliance audits are typically reported to the Auditor-General.

Which of the following is NOT employed by the entity being audited?

Which of the following exists independently from an audit?

The primary purpose of a compliance audit is to determine whether the overall financial statements are in compliance with generally accepted accounting principles.

Why are the auditing standards referred to as the 'force of law' standards?