Deck 15: Audit and Assurance Services in the Public Sector

Question 1

A determination of cost savings is most likely to be an objective of a:

A)regularity audit.
B)compliance audit.
C)performance audit.
D)financial audit.

Answer 1

C

Question 2

What problem arises if the relationship between cause and effect is not determined in a performance audit?

A)The impact on the financial report cannot be determined.
B)The audit cannot proceed.
C)The criteria cannot be established.
D)A recommendation cannot be made to address the cause of the problem.

Answer 2

D

Question 3

The Auditor-General is appointed by:

A)the Governor-General.
B)the Parliament.
C)the Public Service Board.
D)the Minister of Finance.

Answer 3

A

Question 4

What is the main concern of performance auditing?

A)Compliance with relevant laws and regulations.
B)Probity.
C)Financial report attest auditing.
D)Efficiency, economy and effectiveness.

Question 5

Which of the following statements best describes the term 'outcomes' in a performance audit?

A)Number of units produced.
B)Service provided by a particular government program.
C)Consequences for the community of the government program.
D)Economy and efficiency of resources used in achieving outputs.

Question 6

The Auditor-General is ultimately responsible to:

A)the Public Accounts Committee.
B)the Parliament.
C)the Public Service Board.
D)the Minister of Finance.

Question 7

In reporting performance audit findings, why does an auditor evaluate evidence against criteria?

A)To ensure reasonable criteria have been established.
B)To develop conclusions relative to the audit objectives.
C)To develop the audit scope.
D)To determine risk.

Question 8

The proposed annual expenditures of the Commonwealth Government are authorised by:

A)the Auditor-General.
B)the Treasurer.
C)the Department of Finance.
D)the Parliament.

Question 9

Which of the following objectives would not be a primary purpose of a performance audit?

A)A means of assurance that internal controls are functioning as planned.
B)A measure of management performance in meeting organisation goals.
C)Providing the results of internal examinations of financial and accounting matters to a company's top-level management.
D)An aid to the external auditor who is conducting the examination of the financial report.

Question 10

Which of the following statements concerning auditing in the public sector is correct?

A)The Auditor-General only conducts financial report audits in the public sector.
B)Private sector auditors may conduct audits in the public sector as delegates of the Auditor-General.
C)The Auditor-General is appointed by the government.
D)None of the options listed here are correct.

Question 11

Governmental auditing often extends beyond examinations leading to the expression of an opinion on the fairness of financial presentation, and includes audits of efficiency and effectiveness, and:

A)internal control.
B)evaluation.
C)accuracy.
D)compliance.

Question 12

A typical objective of a performance audit is for the auditor to:

A)determine whether the financial report presents the entity's operations fairly.
B)evaluate the feasibility of attaining the entity's operational objectives.
C)make recommendations for improving efficiency, effectiveness and economy.
D)report on the entity's relative success in attaining profit maximisation.

Question 13

Which of the following statements best describes the term 'efficiency'?

A)A reduction in costs through better contracting.
B)Clarifying objectives and policies.
C)Greater outputs from the inputs.
D)Rationalisation of facilities.

Question 14

Governmental auditing includes:

A)financial report auditing.
B)performance auditing.
C)compliance auditing.
D)All of the given answers are correct.

Question 15

Government activities may be carried out through:

A)government departments.
B)statutory authorities.
C)companies.
D)All of the given answers are correct.

Question 16

Which of the following can be considered an example of a performance indicator for effectiveness?

A)A reduction in the number and severity of injuries, resulting from a road safety program.
B)The number of patients treated in a health clinic.
C)A decline in caseloads for social workers.
D)The costs of a job training program for long-term unemployed, per person placed in permanent employment.

Question 17

Public sector entities are required to prepare financial reports based on:

A)cash accounting.
B)accrual accounting.
C)fund accounting.
D)All of the given answers are correct.

Question 18

Which of the following statements concerning AASB 1052 'Disaggregated Disclosures' is not correct?

A)AASB 1052 requires that where local governments are required to use fund accounting for grant purposes, they do not need to prepare general-purpose financial reports.
B)AASB 1052 deems each local government to be a reporting entity.
C)AASB 1052 requires local governments to use accrual accounting.
D)AASB 1052 requires each local government to prepare general-purpose financial reports.

Question 19

Peer reviews of public sector audit offices are normally directed by:

A)the Prime Minister/Premier.
B)the Treasurer/Minister for Finance.
C)public accounts committees.
D)specific legislative requirements.

Question 20

Why is it important to establish performance audit criteria?

A)They are a basis for communication with management.
B)They indicate the scope of the performance audit.
C)They are a basis for developing audit programs and questionnaires.
D)All of the given answers are correct.

Question 21

In a compliance audit, which of the following matters is the auditor primarily concerned about?

A)Whether the financial report is fairly presented in accordance with the identified financial reporting framework.
B)Whether the entity has achieved its stated objectives.
C)Whether the entity has followed the relevant requirements applicable to it.
D)Whether the entity has operated in the most economic and efficient manner.

Question 22

Why should the public sector performance auditor be concerned with avoiding commenting on government policy?

A)Any comment will undermine the public's confidence in the government of the day.
B)Government policy does not affect the performance of the entity.
C)The merits of government policy are matters for political debate and for decision by the executive government.
D)A risk may arise in that the official opposition may use the audit report to criticise the government.

Question 23

Which of the following statements is correct?

A)In compliance audits, an error is considered material if it results in a misstatement in the financial report of more than 10 per cent of net profit.
B)In compliance audits, control deviations are considered material if the control has not been followed in more than 10 per cent of sample transactions.
C)In compliance audits, materiality should be determined by reference to the users of the auditor's report and their information needs.
D)Compliance audits are concerned only with deviations from legislation.

Question 24

Which of the following is an example of improved effectiveness?

A)Greater outputs from the same inputs.
B)Rationalisation of facilities.
C)Introduction of charges where none previously existed.
D)An increase in the percentage of streets rated as having a satisfactory level of cleanliness and appearance in terms of a city's street maintenance program.

Question 25

Which of the following examples is a compliance audit in relation to a government department?

A)Reporting to the minister on the tendering process for the construction of the department's new office block.
B)Reporting on the department's financial report to be presented to Parliament.
C)Reporting to the minister as to whether the department has met the objectives set out in its mission statement.
D)Reporting to the minister as to whether members of the department have followed the government travel guidelines.