A client’s manager approaches the audit team and
threatens to dismiss the auditing firm if the audit team does not
accept the accounting treatment currently being in use by the client.
This represents:
Select one:
a. A familiarity
threat
b. An advocacy threat
c. An intimidation
threat *
d. A self-review threat
Independent
auditors are referred to as ‘independent’ because:
Select one:
a. they
are not employees of the entity being audited *
b. they
are paid by parties outside of the audited entity
c. their
offices are not at the entity’s place of business
d. they
report to users outside of the audited entity
Having
each partner and employee complete annually a questionnaire
concerning ownership of shares and membership on boards of directors
is a procedure relevant to the quality control objective of:
Select one:
a. assignment
of engagement teams
b. client
acceptance and continuance
c. ethical
requirements *
d. engagement
performance
Independence
in fact is where:
Select one:
a. the
auditor maintains an unbiased attitude during the audit
*
b. the
audit firm has an effective quality control system in place in the
conduct of an audit
c. the
audit firm does not provide any non-assurance services to the audit
client
d. the
general public considers that the auditor has acted objectively
The
organisation that has the right to launch an investigation into
auditing companies and individual audits is:
Select one:
a. Companies
Auditors and Liquidators Disciplinary Board (CALDB)
b. Australian
Securities and Investments Commission (ASIC). *
c. Australian
Auditing and Assurance Standards Board (AUASB)
d. Financial
Reporting Council (FRC)
An
auditor’s duty of due care to a client is most likely breached when
the auditor:
Select one:
a. fails
to detect all of a client’s fraudulent activities
b. gives a
client an oral report instead of a written report
c. fails
to follow generally accepted auditing standards *
d. gives
a client incorrect advice based on an honest error of judgment
Audit expectation gap occurs when:
Select one:
a. auditors perform
their duties appropriately and satisfy users’ demands
b. the public is well
educated about auditing
c. user beliefs do not
align with what an auditor has actually done *
d. peer reviews of
audits ensure that auditing standards have been applied correctly and
the standards are at the level that satisfy users’ demand
The
Code of Ethics for Professional Accountant (APES) 110 is:
Select one:
a. legally
applicable to the audited company
b. not
carrying the “force of law”.
c. legally
applicable to both members in practice and members in business of
professional bodies *
d. legally
applicable to the partner of the auditing company only
Which
of the following is NOT an ethical attribute of an external auditor?
Select one:
a. Client
advocacy. *
b. Concern
for the public interest
c. Objectivity.
d. Independence
The
Australian Auditing and Assurance Standards Board (AUASB) is
responsible for:
Select one:
a. The
monitoring of auditor independence
b. The
auditor’s compliance with Australian Auditing Standards
c. The
issuance of Australian Auditing Standards (ASAs). *
d. The
issuance of Australian Accounting Standards (AASB standards).
Which
one of the following is NOT one of the five fundamental principles of
professional conduct set out in the Code of Ethics for Professional
Accountants?
Select one:
a. Continuing
education *
b. Integrity
c. Objectivity
d. Confidentiality
In
the audit of financial statements, the auditor examines and reports
on the adherence of the client’s financial statements to
Select one:
a. legislative
requirements
b. applicable
auditing standards
c. applicable
accounting standards *
d. the
client’s rules and regulations
The
objective of a compliance audit is to determine whether:
Select one:
a. the
company has followed specific rules and regulations that govern the
activities of the entity *
b. organisation
is operating efficiently and effectively
c. the
client’s financial reports are fairly stated in accordance
with AASB standards
d. All of the above
Part
B of the Code of Ethics identifies threats to independence from the
following sources:
Select one:
a. familiarity
and intimidation
b. self-interest,
self-review and advocacy
c. both
A and B *
d. the
work environment
An
audit establishes the conformity of assertions with specified
criteria. In an audit of a financial report, the criteria by which
financial report assertions are judged are:
Select one:
a. applicable
accounting standards *
b. listing
rules of the Australian Securities and Investments Commission
c. Australian
Auditing Standards
d. the
ethical rules of conduct
