Question 1

Good corporate governance requires effective management oversight.This oversight does not include:

Accepted Answer

A) Internal and external non-financial reporting. 
B) Internal and external audit 
C) Oversight of activities to control and report on fraud. 
D) None of the options is correct. 
A) Internal and external non-financial reporting. 
B) Internal and external audit 
C) Oversight of activities to control and report on fraud. 
D) None of the options is correct.

Question 2

Most AIS today are computer based.Auditing the information system requires the auditors to:

Accepted Answer

A) Treat the computer as a black box and work around it 
B) Recognise the special threats inherent in IT and include these in the audit plan 
C) Just look at the manual systems and procedures 
D) Employ ethical hackers to audit the computer system 
A) Treat the computer as a black box and work around it 
B) Recognise the special threats inherent in IT and include these in the audit plan 
C) Just look at the manual systems and procedures 
D) Employ ethical hackers to audit the computer system

Question 3

Which of the following is not a responsibility associated with audit assurance?

Accepted Answer

A) Compare and analyse risk tolerance and mitigation strategies. 
B) Evaluate existing and new controls,costs and effectiveness of monitoring procedures. 
C) Define objectives,scope and priorities 
D) Assess exposure,report position and recommend insurance (if necessary). 
A) Compare and analyse risk tolerance and mitigation strategies. 
B) Evaluate existing and new controls,costs and effectiveness of monitoring procedures. 
C) Define objectives,scope and priorities 
D) Assess exposure,report position and recommend insurance (if necessary).

Question 4

Which of the following is not true?

Accepted Answer

A) Australian Auditing Standards (ASAs)are legally binding auditing standards. 
B) Australian Auditing Standards (ASAs)are issued by the Australian Auditing and Assurance Standards Board. 
C) Australian Auditing Standards (ASAs)set out audit requirements for listed companies under the Corporations Act 
D) Australian Auditing Standards (ASAs)are legally enforceable legislative instruments. 
A) Australian Auditing Standards (ASAs)are legally binding auditing standards. 
B) Australian Auditing Standards (ASAs)are issued by the Australian Auditing and Assurance Standards Board. 
C) Australian Auditing Standards (ASAs)set out audit requirements for listed companies under the Corporations Act 
D) Australian Auditing Standards (ASAs)are legally enforceable legislative instruments.

Question 5

The audit program:

Accepted Answer

A) Is essentially a computerised auditing program that is used to audit a system. 
B) Is essentially an auditing product provided by an auditing firm. 
C) Is essentially a checklist of all the tests and other procedures that the auditor intends to carry out. 
D) None of the options are correct. 
A) Is essentially a computerised auditing program that is used to audit a system. 
B) Is essentially an auditing product provided by an auditing firm. 
C) Is essentially a checklist of all the tests and other procedures that the auditor intends to carry out. 
D) None of the options are correct.

Question 6

Audit quality may be compromised due to: (i)time constraints (ii)management pressure (iii)limited resources.

Accepted Answer

A) (i)(ii)(iii) 
B) (i)(ii) 
C) (ii)(iii) 
D) (i)(iii) 
A) (i)(ii)(iii) 
B) (i)(ii) 
C) (ii)(iii) 
D) (i)(iii)

Question 7

Explain what special purpose audits can do and how can these audits be carried out.

Accepted Answer

Special purpose audits may be commission

Question 8

Which of the following statements regarding auditors is true?

Accepted Answer

A) When the auditors are to form an opinion that the final accounts truly and fairly summarise the underlying transactions,they do not necessarily have to have confidence in the integrity of the AIS. 
B) If the auditors are to form an opinion that the final accounts truly and fairly summarise the underlying transactions then they must have confidence in the integrity of the AIS. 
C) If the auditors are to express confidence in the integrity of the AIS,then they must form an opinion that the final accounts truly and fairly summarise the underlying transactions. 
D) The integrity of the AIS and the auditors' opinion towards the final accounts are irrelevant. 
A) When the auditors are to form an opinion that the final accounts truly and fairly summarise the underlying transactions,they do not necessarily have to have confidence in the integrity of the AIS. 
B) If the auditors are to form an opinion that the final accounts truly and fairly summarise the underlying transactions then they must have confidence in the integrity of the AIS. 
C) If the auditors are to express confidence in the integrity of the AIS,then they must form an opinion that the final accounts truly and fairly summarise the underlying transactions. 
D) The integrity of the AIS and the auditors' opinion towards the final accounts are irrelevant.

Question 9

The inherent risk associated with an operating system that is used by a major stock exchange is:

Accepted Answer

A) Ordinarily high 
B) Ordinarily medium 
C) Ordinarily low 
D) Negligible 
A) Ordinarily high 
B) Ordinarily medium 
C) Ordinarily low 
D) Negligible

Question 10

The external auditors:

Accepted Answer

A) must not use the work of an internal auditor. 
B) can use the work of an internal auditor at whatever way he/she wants. 
C) can use the work of an internal auditor subject to guidelines outlined in ASA 610. 
D) can use the work of an internal auditor subject to guidelines outlined in IFRS. 
A) must not use the work of an internal auditor. 
B) can use the work of an internal auditor at whatever way he/she wants. 
C) can use the work of an internal auditor subject to guidelines outlined in ASA 610. 
D) can use the work of an internal auditor subject to guidelines outlined in IFRS.

Question 11

The detection risk associated with identifying breaches of security in an application system is

Accepted Answer

A) Ordinarily high 
B) Ordinarily medium 
C) Ordinarily low 
D) Negligible 
A) Ordinarily high 
B) Ordinarily medium 
C) Ordinarily low 
D) Negligible

Question 12

What are the two broad areas of responsibility associated with the risk management system?

Accepted Answer

The risk management system involves two

Question 13

Which of the following statements regarding an audit committee is not true?

Accepted Answer

A) An audit committee is set up to oversee accounting and financial reporting. 
B) An audit committee has a mandate to cover a wide range of assurance activities including those not related to financial reporting. 
C) An audit committee is responsible for considering the effectiveness of the company's internal control system,including information technology security and control. 
D) All ASX listed companies must have an audit committee. 
A) An audit committee is set up to oversee accounting and financial reporting. 
B) An audit committee has a mandate to cover a wide range of assurance activities including those not related to financial reporting. 
C) An audit committee is responsible for considering the effectiveness of the company's internal control system,including information technology security and control. 
D) All ASX listed companies must have an audit committee.

Question 14

Which of the following is performed by the internal audit function?

Accepted Answer

A) Evaluate risks. 
B) Implement improved management control systems. 
C) Implement improved risk control systems. 
D) Reviewing the organisation's strategic plans. 
A) Evaluate risks. 
B) Implement improved management control systems. 
C) Implement improved risk control systems. 
D) Reviewing the organisation's strategic plans.

Question 15

Which of the following statements regarding the concept of audit is not true?

Accepted Answer

A) The most common type of audit is the financial statement audit. 
B) The financial statement audit provides an objective opinion on an organisation's financial statements. 
C) Financial statement audit provides absolutely guarantee that the financial reports are free of misstatement. 
D) Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating those results to interested users. 
A) The most common type of audit is the financial statement audit. 
B) The financial statement audit provides an objective opinion on an organisation's financial statements. 
C) Financial statement audit provides absolutely guarantee that the financial reports are free of misstatement. 
D) Auditing is a systematic process of objectively obtaining and evaluating evidence regarding assertions about economic actions and events to ascertain the degree of correspondence between those assertions and established criteria and communicating those results to interested users.

Question 16

In Australia,ASIC found that for the largest companies,audit fees from 2010 to 2011 were reduced by more than $12 million.ASIC later finds that audit quality has:

Accepted Answer

A) improved 
B) unchanged 
C) compromised 
D) The ASIC has not yet arrived at a conclusion. 
A) improved 
B) unchanged 
C) compromised 
D) The ASIC has not yet arrived at a conclusion.

Question 17

AUASB stands for:

Accepted Answer

A) AUstralian Auditing Standards Board 
B) AUditing and Assurance Standards Board 
C) AUstralian Accounting Standards Board 
D) AUditing and Accounting Standards Board 
A) AUstralian Auditing Standards Board 
B) AUditing and Assurance Standards Board 
C) AUstralian Accounting Standards Board 
D) AUditing and Accounting Standards Board

Question 18

Which of the following is not performed by the internal audit function?

Accepted Answer

A) Monitoring internal control. 
B) Examining financial and operational information. 
C) Test transactions. 
D) Implement business processes that are more efficient and effective. 
A) Monitoring internal control. 
B) Examining financial and operational information. 
C) Test transactions. 
D) Implement business processes that are more efficient and effective.

Question 19

How does running test data through the system impose limitations on the auditors?

Accepted Answer

Running test data through the system imp

Question 20

The purpose of the financial statement audit is for users to be able to ascertain the __________ and __________ of the financial statements of an organisation.

Accepted Answer

A) ~ credibility;reliability 
B) trustworthiness;accuracy 
C) correctness;objectivity 
D) None of the options is correct. 
A) ~ credibility;reliability 
B) trustworthiness;accuracy 
C) correctness;objectivity 
D) None of the options is correct.

Good corporate governance requires effective management oversight.This oversight does not include:

Most AIS today are computer based.Auditing the information system requires the auditors to:

Which of the following is not a responsibility associated with audit assurance?

Which of the following is not true?

The audit program:

Audit quality may be compromised due to: (i)time constraints (ii)management pressure (iii)limited resources.

Explain what special purpose audits can do and how can these audits be carried out.

Which of the following statements regarding auditors is true?

The inherent risk associated with an operating system that is used by a major stock exchange is:

The external auditors:

The detection risk associated with identifying breaches of security in an application system is

What are the two broad areas of responsibility associated with the risk management system?

Which of the following statements regarding an audit committee is not true?

Which of the following is performed by the internal audit function?

Which of the following statements regarding the concept of audit is not true?

In Australia,ASIC found that for the largest companies,audit fees from 2010 to 2011 were reduced by more than $12 million.ASIC later finds that audit quality has:

AUASB stands for:

Which of the following is not performed by the internal audit function?

How does running test data through the system impose limitations on the auditors?

The purpose of the financial statement audit is for users to be able to ascertain the and of the financial statements of an organisation.

Systems Fundamentals

Systems Characteristics and Considerations

Database Concepts I

Database Concepts II

XBRL Reporting

System Mapping and Documentation

Internal Controls I

Internal Controls II

Transaction Cycle The Revenue Cycle

Transaction Cycle The Expenditure Cycle

Transaction Cycle The Production Cycle

Transaction Cycle The HR Management and Payroll Cycle

Transaction Cycle The General Ledger and Financial Reporting Cycle

Systems Development

Ethics, fraud and Computer Crime

Filters

Exam 15: Auditing of Accounting Information Systems

Good corporate governance requires effective management oversight.This oversight does not include:

Most AIS today are computer based.Auditing the information system requires the auditors to:

Which of the following is not a responsibility associated with audit assurance?

Which of the following is not true?

The audit program:

Audit quality may be compromised due to: (i)time constraints (ii)management pressure (iii)limited resources.

Explain what special purpose audits can do and how can these audits be carried out.

Which of the following statements regarding auditors is true?

The inherent risk associated with an operating system that is used by a major stock exchange is:

The external auditors:

The detection risk associated with identifying breaches of security in an application system is

What are the two broad areas of responsibility associated with the risk management system?

Which of the following statements regarding an audit committee is not true?

Which of the following is performed by the internal audit function?

Which of the following statements regarding the concept of audit is not true?

In Australia,ASIC found that for the largest companies,audit fees from 2010 to 2011 were reduced by more than $12 million.ASIC later finds that audit quality has:

AUASB stands for:

Which of the following is not performed by the internal audit function?

How does running test data through the system impose limitations on the auditors?

The purpose of the financial statement audit is for users to be able to ascertain the __________ and __________ of the financial statements of an organisation.

Systems Fundamentals

Systems Characteristics and Considerations

Database Concepts I

Database Concepts II

XBRL Reporting

System Mapping and Documentation

Internal Controls I

Internal Controls II

Transaction Cycle The Revenue Cycle

Transaction Cycle The Expenditure Cycle

Transaction Cycle The Production Cycle

Transaction Cycle The HR Management and Payroll Cycle

Transaction Cycle The General Ledger and Financial Reporting Cycle

Systems Development

Ethics, fraud and Computer Crime

Filters

The purpose of the financial statement audit is for users to be able to ascertain the and of the financial statements of an organisation.