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Question(s) / Instruction(s):

ACC3118

1) In auditing accounting data, the primary concern is with:

A) Determining if taxable income has been calculated correctly.

B) Analyzing the non-financial information to be sure that it complies with government

Requirements

 C) Determining whether recorded information properly reflects the economic events that

Occurred during the accounting period

D) Determining if fraud has occurred.

 

2) The demand for assurance services is expected to grow as:

A) More information becomes available through the Internet

B) The demand for forward-looking information increases

C) Clients demand lower cost services

D) all of the above

 

3) There are three categories of attestation services:

A) Assurance of historical financial statements, assurance of historical financial statements, and

Other attestation services

B) Audit of historical financial statements, assurance of historical financial statements, and other

Attestation services

C) Audit of historical financial statements, review of historical financial statements, and other

Attestation services

D) Audit of historical financial statements, review of historical financial statements, and

Assurance about website controls

 

4) Which one of the following is not required in order to become a registered company auditor with

ASIC?

A) Satisfying the Commission that the applicant is a fit and proper person to be so registered

B) Evidence that adequate professional indemnity insurance is held

C) Sufficient practical experience

D) Membership of ICAA, CPA Australia or another prescribed body.

 

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

A) Organization is operating efficiently and effectively.

B) Overall financial statements are stated in accordance with specified criteria.

C) Audited is following specific procedures or rules set down by a peer group authority.

D) None of the above

 

6) As businesses become more complex and need more reliable information, public accountants play

a vital role in:

A) Providing tax services

B) Providing assurance on information other than financial reports

C) Providing business advisory services

D) all of the above

 

7) Which one of the following is not a means of reducing information risk?

A) Providing audited financial statements

B) Sharing the risk with management

C) Independent verification by the user

D) Implementing a system of quality control

 

8) Auditing standards (ASAs):

A) Have the ʹforce of lawʹ under the Corporations Act 2001.

B) Establish mandatory requirements that should be looked upon as minimum standards.

C) Are issued by the AUASB.

D) all of the above.

 

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

A) Auditors now need to be experts in e-commerce and information technology.

B) Auditors must decline to accept the audit of such entities and leave non-audit organizations

Perform these audits.

C) Audit firms now have to have information technology experts as partners in audit firms.

D) Auditors now need a basic knowledge and understanding of e-commerce and information

Technology

 

10) The criteria for evaluating quantitative information vary. For example, in the audit of historical

Financial statements by public accounting firms, the criteria are usually:

A) Regulations of the Australian Taxation Office.

B) Regulations of the Australian Securities and Investment Commission.

C) Applicable accounting standards.

D) Generally accepted auditing standards.

 

11) Which one of the following statements is not true about audit reports?

A) They all follow the same form.

B) They communicate the auditor’s findings to users.

C) They are prepared as the final stage of the audit process.

D) They differ in nature.

 

12) The main purpose of the Corporations Act is to:

A) Establishing appropriate corporate governance mechanisms to promote appropriate decision

Making by participants and managerial accountability to shareholders

B) Ensure that auditors conducting financial statement audits are registered.

C) Give legislative backing to the Australian Securities Exchange’s Listing Rules.

D) Develop and promulgate approved accounting standards.

 

13) To operate effectively, internal auditors must be:

A) Contracted by the organization subject to audit.

B) Registered with ASIC and meet minimum professional development requirements.

C) Independent of the line functions within an organization.

D) Members of either the Institute of Chartered Accountants in Australia or CPA Australia.

 

14) Public accounting firms utilize online resources and databases to:

A) Obtain industry data useful for auditing.

B) Stay current with emerging business issues.

C) Stay current with emerging standard setting issues.

D) all of the above.

 

15) An examination of part of an organization’s procedures and methods for the purpose of evaluating

Efficiency and effectiveness in the manufacturing department is what type of audit?

A) Performance audit

B) Production audit

C) Financial statement audit

D) Compliance audit

 

16) An internal auditor should ideally report to:

A) The ASIC.

B) The external auditors.

C) The audit committee.

 D) The chief finance officer.

 

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

A) Presentation of financial statements in accordance with applicable accounting standards

B) Efficiency and effectiveness of operations

C) Compliance with government regulations

D) All of the above are equally difficult.

 

18) One consequence of CPA Australia’s Quality Assurance Program is likely to be:

A) A reduction in management consulting services provided by public accounting firms.

B) Provision of information to practitioners that can enhance service quality.

C) A reluctance by public accounting firms to take on higher risk audit clients.

D) An increase in disciplinary actions taken.

 

19) Assessing that a company’s policies effectively ensure the company’s compliance with

Environmental standards and laws is:

A) Part of the internal auditor’s responsibilities.

B) Part of the financial statement audit process.

C) An example of an assurance service.

D) An example of a business performance measurement service.

 

20) A compilation report:

A) Communicates an auditor’s findings to a special user group which commissioned the audit.

B) is the means of communication between the Auditor-General and Parliament.

C) is prepared during a taxation audit.

D) Provides no assurance to third parties.

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