Question 1

Sufficiency relates to the quality of audit evidence gathered.

Accepted Answer

A) True 
 B)False

Question 2

Matters of governance interest that the auditor may wish to discuss with those charged with governance include:

Accepted Answer

A)  any practical difficulties encountered in performing the audit. 
B)  the potential effect on the financial report of any material risks and exposures. 
C)  expected modifications to the audit report. 
D)  All of the above

Question 3

Explain the difference between management's and the auditor's responsibility for the financial report.

Accepted Answer

The answer of Explain the difference between management's and the...

Question 4

Those charged with governance are accountable for ensuring that the entity achieves its objectives with regard to which of the following?

Accepted Answer

A)  Compliance with applicable laws 
B)  The reliability of financial reporting 
C)  Both a and b 
D)  None of the above

Question 5

Breaches of accounting standards are not considered to be significant contraventions of the Corporations Act.

Accepted Answer

A) True 
 B)False

Question 6

Material disagreements with management will result in either:

Accepted Answer

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

Question 7

The uninsured loss of inventory as a result of fire subsequent to year-end is an example of a type 2 subsequent event.

Accepted Answer

A) True 
 B)False

Question 8

Matters of governance that the auditor may wish to discuss with those charged with governance include any practical difficulties encountered in performing the audit.

Accepted Answer

A) True 
 B)False

Question 9

The auditor's responsibility for the financial report includes selecting and applying appropriate accounting policies.

Accepted Answer

A) True 
 B)False

Question 10

Explain the potential threats to independence relating to audit fees and how auditor can safeguard against these threats.

Accepted Answer

The answer of Explain the potential threats to independence relating...

Question 11

Identify quantitative and qualitative considerations that are taken into account when the auditor evaluates whether misstatements either cause financial reports to be materially misstated or requires additional disclosure.

Accepted Answer

The answer of Identify quantitative and qualitative considerations that are...

Question 12

Discuss the factors that are relevant when management is assessing the going concern assumption.

Accepted Answer

The answer of Discuss the factors that are relevant when...

Question 13

Which of the following are examples of qualitative considerations that may cause misstatements of quantitatively immaterial amounts to be considered material?

Accepted Answer

A)  The client's compliance with contractual requirements of operating or other agreements 
B)  Key ratios monitored by analysts or other key users of the financial report 
C)  Both a and b 
D)  None of the above

Question 14

Explain why the global financial crisis has resulted in the number of potential and actual legal liability insurance claims and explain how auditors can deal with the risk of litigation in tough economic times.

Accepted Answer

The answer of Explain why the global financial crisis has...

Question 15

Which of the following are areas normally covered during the wrap-up of an audit engagement?

Accepted Answer

A)  Perform subsequent events procedures 
B)  Consider the amount used for materiality 
C)  Reconsider the assessments of internal control at the entity level and the risk of fraud 
D)  All of the above

Question 16

Which of the following statements regarding judgemental misstatements is in?

Accepted Answer

A)  They are the same as errors 
B)  They can arise as a result of a difference in underlying assumptions by the client and the auditor 
C)  They are not the same as errors 
D)  They can arise as a result of a difference in the application of judgement by the client and the auditor

Question 17

The client's compliance with contractual requirements of operating agreements is an example of a qualitative factor that may cause misstatements of quantitatively immaterial amounts to be considered material.

Accepted Answer

A) True 
 B)False

Question 18

Explain the difference between type 1 and type 2 subsequent events and provide examples of each type of event.

Accepted Answer

The answer of Explain the difference between type 1 and...

Question 19

Which of the following would not be included in an audit report?

Accepted Answer

A)  The auditor's address 
B)  An introductory paragraph 
C)  The audit fee charged to the client 
D)  The auditor's responsibility for the financial report

Question 20

The final phase of an audit includes which of the following:

Accepted Answer

A)  performing substantive tests of account balances. 
B)  gaining an understanding of the client's internal control system. 
C)  confirming the terms of the audit engagement with the auditor. 
D)  determining whether the audit evidence obtained is sufficient and appropriate to reduce the risk of material misstatements in the financial report to an acceptably low level.

Exam 12: Completing and Reporting on the Audit

Sufficiency relates to the quality of audit evidence gathered.

Matters of governance interest that the auditor may wish to discuss with those charged with governance include:

Explain the difference between management's and the auditor's responsibility for the financial report.

Those charged with governance are accountable for ensuring that the entity achieves its objectives with regard to which of the following?

Breaches of accounting standards are not considered to be significant contraventions of the Corporations Act.

Material disagreements with management will result in either:

The uninsured loss of inventory as a result of fire subsequent to year-end is an example of a type 2 subsequent event.

Matters of governance that the auditor may wish to discuss with those charged with governance include any practical difficulties encountered in performing the audit.

The auditor's responsibility for the financial report includes selecting and applying appropriate accounting policies.

Explain the potential threats to independence relating to audit fees and how auditor can safeguard against these threats.

Identify quantitative and qualitative considerations that are taken into account when the auditor evaluates whether misstatements either cause financial reports to be materially misstated or requires additional disclosure.

Discuss the factors that are relevant when management is assessing the going concern assumption.

Which of the following are examples of qualitative considerations that may cause misstatements of quantitatively immaterial amounts to be considered material?

Explain why the global financial crisis has resulted in the number of potential and actual legal liability insurance claims and explain how auditors can deal with the risk of litigation in tough economic times.

Which of the following are areas normally covered during the wrap-up of an audit engagement?

Which of the following statements regarding judgemental misstatements is in?

The client's compliance with contractual requirements of operating agreements is an example of a qualitative factor that may cause misstatements of quantitatively immaterial amounts to be considered material.

Explain the difference between type 1 and type 2 subsequent events and provide examples of each type of event.

Which of the following would not be included in an audit report?

The final phase of an audit includes which of the following: