An Overview of Auditing

Topics: Auditing, Internal control, Financial audit Pages: 61 (17858 words) Published: January 21, 2015

Chapter 1
An overview of auditing

Multiple Choice

1. The three major professional accounting bodies in Australia are: a. ICAA, CPA and ASIC.
b. CPA Australia, NIA and AARF.
c. ATO, AUASB and ASIC.
d. ICAA, CPA Australia and NIA.

The correct option is d.
Feedback: Section 1.3 The auditing environment

2. Which body has a mission ‘to develop, in the public interest, high-quality auditing and assurance standards and related guidance to enhance the relevance, reliability and timeliness of information provided to users of audit and assurance services’? a. the IAASB.

b. the AASB.
c. the AUASB.
d. the FRC.

The corrects option is c.
Feedback: Section 1.4 Auditing standards

3. Which of these is not an objective of the ASIC?
a. to maintain, facilitate and improve the performance of companies. b. to establish new institutional arrangements for standard setting. c. to receive, process and store information given to the Commission under the laws. d. all of the above are objectives of the ASIC

The corrects option is b.
Feedback: Section 1.3 The auditing environment

4. Which of the following is true regarding auditors and fraud? a. auditors are required to detect all fraud during an audit. b. auditors should actively investigate the possibility of fraud if suspicious circumstances exist c. in the Kingston Cotton Mill case it was said that the audit role was not primarily to detect fraud d. b. and c. are true

The correct option is d.
Feedback: Section 1.3 The auditing environment
5. Which of these was not an Australian corporate collapse?
a. HIH Insurance Ltd.
b. One.Tel.
c. Harris Scarfe.
d. all were Australian corporate collapses

The correct option is d.
Feedback: Section 1.1 Auditing fundamentals

6. ABC firm are the auditors of XYZ Company. The partner responsible for the audit has recently spent a week working with XYZ as a paid consultant on their internal control systems. The ethical principle that has been breached is: a. auditor independence.

b. auditor appointment.
c. auditor rotation.
d. auditor competence.

The correct option is a.
Feedback: Section 1.3 The auditing environment

7. Which of these is not a reform introduced by CLERP 9 in relation to Auditors and annual general meetings (AGMs)? a. shareholders can submit written questions to the auditor before the AGM relating to the auditor’s report and the conduct of the audit. b. the auditor must attend the AGM.

c. the auditor must address the AGM.
d. a reasonable opportunity must be allowed for members as a whole to ask questions of the auditor and for the auditor to respond.

The correct option is c.
Feedback: Section 1.3 The auditing environment

8. The body that is responsible for setting the auditing standards in Australia is: a. AUASB.
b. AASB.
c. IAASB.
d. FRC.

The correct option is a.
Feedback: Section 1.4 Auditing standards

9. The statutory body that is responsible for hearing applications in Australia as to whether auditors and liquidators have breached the Corporations Act is: a. ASIC.
b. CALDB.
c. FRC.
d. AUASB.

The correct option is b.
Feedback: Section 1.3 The auditing environment

10. It is not a requirement to be registered as an auditor in Australia to: a. be a fit and proper person
b. be a member of CPA Australia, the ICAA or other approved body. c. have a degree or diploma from a course in accounting (including auditing) of not less than 3 years duration and in commercial law(including company law) of not less than 2 years duration or have other equivalent qualifications acceptable to ASIC. d. all are requirements to be registered as an auditor in Australia.

The correct option is d.
Feedback: Section 1.5 The accounting profession and its associated organisations

11. The oversight structure of financial reporting in Australia had many levels. CALDB is part of which level? a. regulation by the profession...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • AUDITING Essay
  • Auditing Essay
  • Auditing Gaming Essay
  • Essay about auditing
  • auditing Essay
  • Auditing Essay
  • auditing Essay
  • Auditing Essay

Become a StudyMode Member

Sign Up - It's Free