Question 1

The provision of internal audit services to an audit client may place at risk which of the following ethical attributes?

Accepted Answer

A)  confidentiality 
B)  independence 
C)  competence and due care 
D)  all of the above 
A)  confidentiality 
B)  independence 
C)  competence and due care 
D)  all of the above

Question 2

The regulatory mechanisms addressing corporate governance in Australia emphasise:

Accepted Answer

A)  accountability and transparency through required disclosures. 
B)  the Australian Securities Exchange's Corporate Governance Council Principles of Good Governance and Best Practice Recommendations. 
C)  accountability and transparency through the auditor. 
D)  all of the above 
A)  accountability and transparency through required disclosures. 
B)  the Australian Securities Exchange's Corporate Governance Council Principles of Good Governance and Best Practice Recommendations. 
C)  accountability and transparency through the auditor. 
D)  all of the above

Question 3

When there are substantial unpaid fees outstanding from previous audit work:

Accepted Answer

A)  the audit opinion should be withheld. 
B)  independence can be compromised if the unpaid fees take on the character of a loan. 
C)  the auditor should seek removal from office. 
D)  a fee premium can be applied to the current audit. 
A)  the audit opinion should be withheld. 
B)  independence can be compromised if the unpaid fees take on the character of a loan. 
C)  the auditor should seek removal from office. 
D)  a fee premium can be applied to the current audit.

Question 4

Section 324CH lists 19 relationships that establish a conflict of interest.Which relationship that the auditor may have with the client is NOT included?

Accepted Answer

A)  has an asset that is an investment in the audited body 
B)  has an asset that is an immaterial investment in an entity that has a controlling interest in the audited body 
C)  owes an amount of more than $5 000 to the audited body 
D)  has an asset that is a material investment in an entity that has a controlling interest in the audited body 
A)  has an asset that is an investment in the audited body 
B)  has an asset that is an immaterial investment in an entity that has a controlling interest in the audited body 
C)  owes an amount of more than $5 000 to the audited body 
D)  has an asset that is a material investment in an entity that has a controlling interest in the audited body

Question 5

The main reason for communication between the predecessor and successor auditor is to:

Accepted Answer

A)  establish the likelihood that fees will be paid. 
B)  pass on working papers. 
C)  satisfy ASIC requirements. 
D)  determine any implications for the independence of the successor. 
A)  establish the likelihood that fees will be paid. 
B)  pass on working papers. 
C)  satisfy ASIC requirements. 
D)  determine any implications for the independence of the successor.

Question 6

Which one of the following statements is NOT correct? Expulsion from CPA Australia or the ICAA for disciplinary reasons:

Accepted Answer

A)  prevents an individual from practising as a public accountant. 
B)  should be seen as a weighty social sanction. 
C)  might provide a basis for the Companies Auditors and Liquidators Disciplinary Board to suspend or cancel registration. 
D)  should be seen as a weighty economic sanction. 
A)  prevents an individual from practising as a public accountant. 
B)  should be seen as a weighty social sanction. 
C)  might provide a basis for the Companies Auditors and Liquidators Disciplinary Board to suspend or cancel registration. 
D)  should be seen as a weighty economic sanction.

Question 7

One of the fundamental principles of the Code of Ethics for Professional Accountants deals with professional behaviour.This requires accountants to:

Accepted Answer

A)  be straightforward and honest. 
B)  maintain their knowledge and AACSB at an appropriately high level. 
C)  refrain from any conduct that may bring discredit to their profession. 
D)  all of the above 
A)  be straightforward and honest. 
B)  maintain their knowledge and AACSB at an appropriately high level. 
C)  refrain from any conduct that may bring discredit to their profession. 
D)  all of the above

Question 8

If the outgoing auditor refuses to communicate with the successor auditor:

Accepted Answer

A)  ASIC should be informed so that action can be instigated against the outgoing auditor. 
B)  the client should withhold payment of the audit fee. 
C)  this is a breach of the ethical rules. 
D)  all of the above 
A)  ASIC should be informed so that action can be instigated against the outgoing auditor. 
B)  the client should withhold payment of the audit fee. 
C)  this is a breach of the ethical rules. 
D)  all of the above

Question 9

The Code of Ethics for Professional Accountants is issued by the:

Accepted Answer

A)  Australian Accounting Standards Board. 
B)  Corporations Act. 
C)  Australian Professional Ethics Standards Board. 
D)  Australian Securities Exchange. 
A)  Australian Accounting Standards Board. 
B)  Corporations Act. 
C)  Australian Professional Ethics Standards Board. 
D)  Australian Securities Exchange.

Question 10

ASCQC1 requires the audit:

Accepted Answer

A)  firm to establish policies and procedures to provide reasonable assurance to maintain an appropriate level of independence. 
B)  firm to not receive fees totalling more than 15% of total fees from one audit client. 
C)  firm to establish procedures to assess the integrity of the audit client. 
D)  team to be independent. 
A)  firm to establish policies and procedures to provide reasonable assurance to maintain an appropriate level of independence. 
B)  firm to not receive fees totalling more than 15% of total fees from one audit client. 
C)  firm to establish procedures to assess the integrity of the audit client. 
D)  team to be independent.

Question 11

The Code of Ethics for Professional Accountants should be considered as individual rules applicable to individual members according to their circumstances.

Accepted Answer

A) True 
 B)False

Question 12

An example of a self-interest threat is:

Accepted Answer

A)  the auditor being influenced by undue pressure from the audit client. 
B)  the auditor promoting a client's position. 
C)  a financial interest influencing the auditor's judgement. 
D)  the auditor not appropriately evaluating the results of an associate auditor. 
A)  the auditor being influenced by undue pressure from the audit client. 
B)  the auditor promoting a client's position. 
C)  a financial interest influencing the auditor's judgement. 
D)  the auditor not appropriately evaluating the results of an associate auditor.

Question 13

The auditor's ultimate defence where conflicts are sufficiently great so as to compromise objectivity is:

Accepted Answer

A)  APES 110. 
B)  the working papers. 
C)  resignation. 
D)  whistle blowing. 
A)  APES 110. 
B)  the working papers. 
C)  resignation. 
D)  whistle blowing.

Question 14

There are five fundamental principles of professional conduct set out in Part A of the Code of Ethics for Professional Accountants.List each and briefly discuss each in the context of provision of audit services.

Accepted Answer

1.Integrity.Auditors must be straightfor

Question 15

Which one of the following statements about audit committees is NOT correct?

Accepted Answer

A)  Members are selected from a company's board of directors. 
B)  Ideally, members should be actively involved in company management. 
C)  They help to keep auditors independent of management. 
D)  Most have 3-5 members. 
A)  Members are selected from a company's board of directors. 
B)  Ideally, members should be actively involved in company management. 
C)  They help to keep auditors independent of management. 
D)  Most have 3-5 members.

Question 16

Discuss the role and responsibility of the audit committee.

Accepted Answer

The audit committee is a subcommittee of

Question 17

The Corporations Act independence requirements are expressed in terms of:

Accepted Answer

A)  rules that apply only to specific situations. 
B)  fundamental principles of professional ethics. 
C)  circumstances that might impair an auditor's objectivity and impartial judgement. 
D)  threats to independence and safeguards that should be applied. 
A)  rules that apply only to specific situations. 
B)  fundamental principles of professional ethics. 
C)  circumstances that might impair an auditor's objectivity and impartial judgement. 
D)  threats to independence and safeguards that should be applied.

Question 18

Corporate failures are signals of failures in audit quality in the conduct of an audit.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is an example of audit failure?

Accepted Answer

A)  There is business failure. 
B)  The auditor failed to use due care and AACSB in the conduct of the audit. 
C)  The client company is insolvent. 
D)  all of the above 
A)  There is business failure. 
B)  The auditor failed to use due care and AACSB in the conduct of the audit. 
C)  The client company is insolvent. 
D)  all of the above

Question 20

How well an audit detects and reports material misstatements in financial statements is a measure of:

Accepted Answer

A)  auditor competence. 
B)  audit completeness. 
C)  audit quality. 
D)  independence. 
A)  auditor competence. 
B)  audit completeness. 
C)  audit quality. 
D)  independence.

The provision of internal audit services to an audit client may place at risk which of the following ethical attributes?

The regulatory mechanisms addressing corporate governance in Australia emphasise:

When there are substantial unpaid fees outstanding from previous audit work:

Section 324CH lists 19 relationships that establish a conflict of interest.Which relationship that the auditor may have with the client is NOT included?

The main reason for communication between the predecessor and successor auditor is to:

Which one of the following statements is NOT correct? Expulsion from CPA Australia or the ICAA for disciplinary reasons:

One of the fundamental principles of the Code of Ethics for Professional Accountants deals with professional behaviour.This requires accountants to:

If the outgoing auditor refuses to communicate with the successor auditor:

The Code of Ethics for Professional Accountants is issued by the:

ASCQC1 requires the audit:

The Code of Ethics for Professional Accountants should be considered as individual rules applicable to individual members according to their circumstances.

An example of a self-interest threat is:

The auditor's ultimate defence where conflicts are sufficiently great so as to compromise objectivity is:

There are five fundamental principles of professional conduct set out in Part A of the Code of Ethics for Professional Accountants.List each and briefly discuss each in the context of provision of audit services.

Which one of the following statements about audit committees is NOT correct?

Discuss the role and responsibility of the audit committee.

The Corporations Act independence requirements are expressed in terms of:

Corporate failures are signals of failures in audit quality in the conduct of an audit.

Which of the following is an example of audit failure?

How well an audit detects and reports material misstatements in financial statements is a measure of:

Demand for audit and assurance services

Auditors’ legal environment

Audit responsibilities and objectives

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Overall audit plan and audit program

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit sampling

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters

Exam 3: Audit quality and ethics

The provision of internal audit services to an audit client may place at risk which of the following ethical attributes?

The regulatory mechanisms addressing corporate governance in Australia emphasise:

When there are substantial unpaid fees outstanding from previous audit work:

Section 324CH lists 19 relationships that establish a conflict of interest.Which relationship that the auditor may have with the client is NOT included?

The main reason for communication between the predecessor and successor auditor is to:

Which one of the following statements is NOT correct? Expulsion from CPA Australia or the ICAA for disciplinary reasons:

One of the fundamental principles of the Code of Ethics for Professional Accountants deals with professional behaviour.This requires accountants to:

If the outgoing auditor refuses to communicate with the successor auditor:

The Code of Ethics for Professional Accountants is issued by the:

ASCQC1 requires the audit:

The Code of Ethics for Professional Accountants should be considered as individual rules applicable to individual members according to their circumstances.

An example of a self-interest threat is:

The auditor's ultimate defence where conflicts are sufficiently great so as to compromise objectivity is:

There are five fundamental principles of professional conduct set out in Part A of the Code of Ethics for Professional Accountants.List each and briefly discuss each in the context of provision of audit services.

Which one of the following statements about audit committees is NOT correct?

Discuss the role and responsibility of the audit committee.

The Corporations Act independence requirements are expressed in terms of:

Corporate failures are signals of failures in audit quality in the conduct of an audit.

Which of the following is an example of audit failure?

How well an audit detects and reports material misstatements in financial statements is a measure of:

Demand for audit and assurance services

Auditors’ legal environment

Audit responsibilities and objectives

Audit evidence

Audit planning and documentation

Materiality and risk

Internal control and control risk

Fraud auditing

The impact of information technology on the audit process

Overall audit plan and audit program

Audit of the sales and collection cycle: Tests of controls and substantive tests of transactions

Completing tests in the sales and collection cycle: Accounts receivable

Audit sampling

Audit of transaction cycles and financial statement balances I

Audit of transaction cycles and financial statement balances II

Completing the audit

Audit reporting

Other auditing and assurance engagements

Filters