Question 1

Discuss the advantages and disadvantages of making auditing standards more specific.

Accepted Answer

The answer of Discuss the advantages and disadvantages of making...

Question 2

Reviewing operating procedures and methods is a characteristic of:

Accepted Answer

A)  an attestation engagement. 
B)  a compilation engagement. 
C)  a performance audit. 
D)  a compliance audit.

Question 3

The impact of e-commerce on public accountants who perform audits of such entities is that:

Accepted Answer

A)  audit firms now must have information technology experts as partners in audit firms. 
B)  auditors now need to be experts in e-commerce and information technology. 
C)  auditors now need a basic knowledge and understanding of e-commerce and information technology. 
D)  auditors must decline to accept the audit of such entities and leave non-audit organisations to perform these audits.

Question 4

Two types of attestation services provided by public accounting firms are audits and reviews.Discuss the similarities and differences between these two types of attestation services.Which type provides the most assurance?

Accepted Answer

The answer of Two types of attestation services provided by...

Question 5

An audit of financial statements is conducted to determine whether the:

Accepted Answer

A)  organisation is operating efficiently and effectively. 
B)  overall financial statements are stated in accordance with specified criteria. 
C)  auditee is following specific procedures or rules set down by a peer group authority. 
D)  none of the above

Question 6

Improving operational controls is one way an auditor is able to:

Accepted Answer

A)  determine if a potential client is trustworthy. 
B)  help implement recommendations that improve profitability. 
C)  complete the final stages of the audit. 
D)  provide consulting services during the audit. Answer B

Question 7

Public accounting firms utilise online resources and databases to:

Accepted Answer

A)  stay current with emerging business issues. 
B)  stay current with emerging standard setting issues. 
C)  obtain industry data useful for auditing. 
D)  all of the above

Question 8

List the six mandatory elements of a system of quality control for audit engagements listed under ASA 220.

Accepted Answer

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Question 9

To operate effectively, internal auditors:

Accepted Answer

A)  report on the financial statements of the organisation. 
B)  are independent of the organisation. 
C)  are independent of the line functions in an organisation. 
D)  none of the above

Question 10

To operate effectively, internal auditors must be:

Accepted Answer

A)  registered with ASIC and meet minimum professional development requirements. 
B)  independent of the line functions within an organisation. 
C)  contracted by the organisation subject to audit. 
D)  members of either the Institute of Chartered Accountants in Australia or CPA Australia.

Question 11

Public accounting firms are NOT allowed to provide bookkeeping services for audit clients.

Accepted Answer

A) True 
 B)False

Question 12

Statements of auditing standards (ASAs)are issued by:

Accepted Answer

A)  the Institute of Chartered Accountants in Australia. 
B)  the Australian Securities Exchange. 
C)  Australian Auditing and Assurance Standards Board. 
D)  CPA Australia.

Question 13

An audit of historical financial statements is a form of:

Accepted Answer

A)  assurance service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with auditing standards. 
B)  attestation service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with auditing standards. 
C)  attestation service in which the auditor issues a written report expressing an opinion about whether the financial statements are in material conformity with accounting standards. 
D)  none of the above

Question 14

In 'auditing' accounting data, the primary concern is with:

Accepted Answer

A)  determining if fraud has occurred. 
B)  determining whether recorded information properly reflects the economic events that occurred during the accounting period. 
C)  analysing the nonfinancial information to be sure that it complies with government requirements. 
D)  determining if taxable income has been calculated correctly.

Exam 1: Demand for audit and assurance services