Question 1

APES 110 Code of Ethics for Professional Accountants considers a material direct financial interest in an audit client to be:

Accepted Answer

A)  providing taxation services to a client. 
B)  charging a fee contingent upon an outcome. 
C)  the auditor having a loan from an audit client who is a financial institution. 
D)  accepting commissions from an audit client. 
A)  providing taxation services to a client. 
B)  charging a fee contingent upon an outcome. 
C)  the auditor having a loan from an audit client who is a financial institution. 
D)  accepting commissions from an audit client.

Question 2

The Code of Ethics for Professional Accountants (APES 110)is issued by:

Accepted Answer

A)  ASIC and the ICAA. 
B)  ASIC. 
C)  AARF. 
D)  APESB. 
A)  ASIC and the ICAA. 
B)  ASIC. 
C)  AARF. 
D)  APESB.

Question 3

List and describe the six-step process for resolving ethical dilemmas.

Accepted Answer

1.Obtain the relevant facts
2.Identify t

Question 4

ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information requires policies and procedures including:

Accepted Answer

A)  acceptance and continuance of client relationships and specific engagements. 
B)  leadership responsibilities for quality on audits. 
C)  ethical requirements (including independence). 
D)  all of the above 
A)  acceptance and continuance of client relationships and specific engagements. 
B)  leadership responsibilities for quality on audits. 
C)  ethical requirements (including independence). 
D)  all of the above

Question 5

If a public accounting firm is requested by a client of another audit firm to provide an opinion on the application of an accounting principle, the public accounting firm should:

Accepted Answer

A)  inform ASIC. 
B)  advise the existing auditor. 
C)  refuse to give an opinion. 
D)  all of the above 
A)  inform ASIC. 
B)  advise the existing auditor. 
C)  refuse to give an opinion. 
D)  all of the above

Question 6

When a firm undertakes both internal and external auditing services for the same entity, which of the following must be applied for the external auditor to demonstrate independence?

Accepted Answer

A)  Any recommendations made by auditors are for implementation by management rather than the auditor. 
B)  The external auditor should gather sufficient appropriate audit and rely no more than usual on internal audit work. 
C)  The external auditor should not assume the role of management when undertaking internal audit services. 
D)  all of the above 
A)  Any recommendations made by auditors are for implementation by management rather than the auditor. 
B)  The external auditor should gather sufficient appropriate audit and rely no more than usual on internal audit work. 
C)  The external auditor should not assume the role of management when undertaking internal audit services. 
D)  all of the above

Question 7

The agency view of the corporation emphasises:

Accepted Answer

A)  a control-oriented approach to governance. 
B)  mechanisms designed to curb managerial self-serving decisions and actions. 
C)  issues associated with the potential conflicts of interest of management (as the agents of the owners) in serving the interests of shareholders (as the owners of the corporation). 
D)  all of the above 
A)  a control-oriented approach to governance. 
B)  mechanisms designed to curb managerial self-serving decisions and actions. 
C)  issues associated with the potential conflicts of interest of management (as the agents of the owners) in serving the interests of shareholders (as the owners of the corporation). 
D)  all of the above

Question 8

An advantage of specific rules in the Code of Ethics for Professional Accountants is the enforceability of minimum behaviour and performance standards.

Accepted Answer

A) True 
 B)False

Question 9

Does the Code of Ethics for Professional Accountants permit a public accounting firm to undertake bookkeeping and audit services for the same client?

Accepted Answer

Yes, but only in limited circumstances.

Question 10

The material financial interests rule means that:

Accepted Answer

A)  an auditor cannot accept payment from the auditee. 
B)  an auditor should be involved in the executive function of a client to maximise the benefits achieved from the engagement. 
C)  a public accounting firm cannot accept an audit client if anyone in the practice has a material shareholding in the potential client. 
D)  an auditor cannot be assigned to the audit of a bank with which that auditor has a home mortgage. 
A)  an auditor cannot accept payment from the auditee. 
B)  an auditor should be involved in the executive function of a client to maximise the benefits achieved from the engagement. 
C)  a public accounting firm cannot accept an audit client if anyone in the practice has a material shareholding in the potential client. 
D)  an auditor cannot be assigned to the audit of a bank with which that auditor has a home mortgage.

Question 11

What is auditor independence and why is it so important?

Accepted Answer

Independence in auditing means taking an

Question 12

Maintaining an unbiased attitude during the audit illustrates:

Accepted Answer

A)  client confidentiality. 
B)  independence in fact. 
C)  independence in appearance. 
D)  professional scepticism. 
A)  client confidentiality. 
B)  independence in fact. 
C)  independence in appearance. 
D)  professional scepticism.

Question 13

Discuss the ways in which both the accounting profession and society itself encourages public accountants to conduct themselves in a professional manner.What factors influence the ethical conduct of audit practitioners?

Accepted Answer

These are some of the many factors that

Question 14

Many of the ethical values of society are NOT incorporated into laws because:

Accepted Answer

A)  it is not cost-beneficial to do so. 
B)  of the judgmental nature of particular values. 
C)  of enforcement difficulties. 
D)  of cultural differences in society. 
A)  it is not cost-beneficial to do so. 
B)  of the judgmental nature of particular values. 
C)  of enforcement difficulties. 
D)  of cultural differences in society.

Question 15

A factor to consider when setting fees for an engagement is the:

Accepted Answer

A)  personal opinion of the lead auditor on the engagement. 
B)  time of all people engaged in the work. 
C)  opinion to be rendered as a result of the audit findings. 
D)  use of internal auditors. 
A)  personal opinion of the lead auditor on the engagement. 
B)  time of all people engaged in the work. 
C)  opinion to be rendered as a result of the audit findings. 
D)  use of internal auditors.

Question 16

Which section in Part B of the Code of Ethics for Professional Accountants addresses conflicts of interest?

Accepted Answer

A)  240 
B)  220 
C)  270 
D)  291 
A)  240 
B)  220 
C)  270 
D)  291

Question 17

An audit partner may own shares in a company that is an audit client if the value of the shares is immaterial.

Accepted Answer

A) True 
 B)False

Question 18

To preserve audit independence, the review partner must rotate every 5 years.

Accepted Answer

A) True 
 B)False

Question 19

What is a factor that may influence the effectiveness of an audit committee?

Accepted Answer

A)  the leadership style of the chairperson 
B)  auditor rotation 
C)  number of auditors on the audit team 
D)  experience of its members 
A)  the leadership style of the chairperson 
B)  auditor rotation 
C)  number of auditors on the audit team 
D)  experience of its members

Question 20

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?

Accepted Answer

A)  objectivity 
B)  continuing education 
C)  confidentiality 
D)  integrity 
A)  objectivity 
B)  continuing education 
C)  confidentiality 
D)  integrity

APES 110 Code of Ethics for Professional Accountants considers a material direct financial interest in an audit client to be:

The Code of Ethics for Professional Accountants (APES 110)is issued by:

List and describe the six-step process for resolving ethical dilemmas.

ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information requires policies and procedures including:

If a public accounting firm is requested by a client of another audit firm to provide an opinion on the application of an accounting principle, the public accounting firm should:

When a firm undertakes both internal and external auditing services for the same entity, which of the following must be applied for the external auditor to demonstrate independence?

The agency view of the corporation emphasises:

An advantage of specific rules in the Code of Ethics for Professional Accountants is the enforceability of minimum behaviour and performance standards.

Does the Code of Ethics for Professional Accountants permit a public accounting firm to undertake bookkeeping and audit services for the same client?

The material financial interests rule means that:

What is auditor independence and why is it so important?

Maintaining an unbiased attitude during the audit illustrates:

Discuss the ways in which both the accounting profession and society itself encourages public accountants to conduct themselves in a professional manner.What factors influence the ethical conduct of audit practitioners?

Many of the ethical values of society are NOT incorporated into laws because:

A factor to consider when setting fees for an engagement is the:

Which section in Part B of the Code of Ethics for Professional Accountants addresses conflicts of interest?

An audit partner may own shares in a company that is an audit client if the value of the shares is immaterial.

To preserve audit independence, the review partner must rotate every 5 years.

What is a factor that may influence the effectiveness of an audit committee?

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?

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

APES 110 Code of Ethics for Professional Accountants considers a material direct financial interest in an audit client to be:

The Code of Ethics for Professional Accountants (APES 110)is issued by:

List and describe the six-step process for resolving ethical dilemmas.

ASA 220 Quality Control for an Audit of a Financial Report and Other Historical Financial Information requires policies and procedures including:

If a public accounting firm is requested by a client of another audit firm to provide an opinion on the application of an accounting principle, the public accounting firm should:

When a firm undertakes both internal and external auditing services for the same entity, which of the following must be applied for the external auditor to demonstrate independence?

The agency view of the corporation emphasises:

An advantage of specific rules in the Code of Ethics for Professional Accountants is the enforceability of minimum behaviour and performance standards.

Does the Code of Ethics for Professional Accountants permit a public accounting firm to undertake bookkeeping and audit services for the same client?

The material financial interests rule means that:

What is auditor independence and why is it so important?

Maintaining an unbiased attitude during the audit illustrates:

Discuss the ways in which both the accounting profession and society itself encourages public accountants to conduct themselves in a professional manner.What factors influence the ethical conduct of audit practitioners?

Many of the ethical values of society are NOT incorporated into laws because:

A factor to consider when setting fees for an engagement is the:

Which section in Part B of the Code of Ethics for Professional Accountants addresses conflicts of interest?

An audit partner may own shares in a company that is an audit client if the value of the shares is immaterial.

To preserve audit independence, the review partner must rotate every 5 years.

What is a factor that may influence the effectiveness of an audit committee?

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?

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