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AUDITING AND ASSURANCE SERVICES IN AUSTRALIA 7TH EDITION TEST BANK
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AUDITING AND ASSURANCE SERVICES IN AUSTRALIA 7TH EDITION TEST BANK
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, Chapter 01 TestbankStudent: ___________________________________________________________________________
1. Which of the following is not an element of an assurance engagement?
A. Three-party relationship.
B. Approved assurance standards.
C. Sufficient appropriate evidence.
D. A written assurance report.
2. An audit establishes the conformity of assertions with specified criteria. In an audit of a financial report, the criteria by which
financial report assertions are judged are:
A. the ethical rules of conduct.
B. Australian Auditing Standards.
C. listing rules of the Australian Securities and Investments Commission.
D. applicable accounting standards.
3. Who is the responsible party for the adequacy of the disclosure in the financial report and accompanying notes?
A. Auditor in charge of fieldwork.
B. The entity's board of directors.
C. Auditor who signs the auditor's report.
D. The Australian Securities and Investments Commission.
4. At what levels can assurance be provided under the assurance services framework?
A. Reasonable assurance and limited assurance.
B. High assurance and reasonable assurance.
C. Assurance can be provided on a continuum from 0% to 100%.
D. Assurance can be provided on a continuum from absolute to limited.
5. Independent auditors are referred to as ‘independent' because:
A. their offices are not at the entity's place of business.
B. they are not employees of the entity being audited.
C. they are paid by parties outside of the audited entity.
D. they report to users outside of the audited entity.
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
,6. The highest level of assurance is provided by:
A. compiling financial reports.
B. agreed-upon procedures.
C. review.
D. audit.
7. Which of the following can be the underlying subject matter of the audit?
A. The financial report of a company.
B. The Australian accounting standards.
C. The Australian auditing standards.
D. The auditor's report.
8. To which assurance engagements does the Framework for Assurance Engagements apply?
A. Audits of historical financial information.
B. Reviews of historical financial information.
C. Assurance engagements other than audits or reviews of historical financial information.
D. All of the given answers are correct.
9. What is a direct engagement?
A. The assurance provider is directly appointed by the responsible party.
B. The auditor directly measures or evaluates the underlying subject matter against the criteria.
C. Shareholders directly appoint the auditor, rather than the company.
D. The assurance engagement contains both financial report and performance engagement elements.
10. The auditor's judgment concerning the overall fairness of the presentation of financial position, results of operations and cash
flows is applied within the framework of:
A. Australian auditing standards that include the concept of materiality.
B. quality control.
C. the agreed reporting framework.
D. the auditor's assessment of the audited entity's level of control risk.
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
, 11. To which type of assurance engagement does the umbrella standard ASAE 3000 (ISAE 3000) Assurance Engagements other
than Audits and Reviews of Historical Financial Information not apply?
A. A performance engagement on a government department.
B. A review of a half-yearly financial report.
C. A limited assurance report on the effectiveness of internal control.
D. A limited assurance engagement on prospective financial information.
12. Independent auditors perform audits on the financial reports of public companies. This type of auditing can best be described as:
A. a discipline that assures financial information presented by management.
B. an activity whose purpose is to search for irregularities.
C. a regulatory function that prevents the issuance of improper financial information.
D. a professional activity that measures and communicates financial and business data.
13. An audit of the financial report of Campbell Ltd, an Australian listed company, is being conducted by an external auditor. The
external auditor is expected to:
A. express an opinion as to the attractiveness of Campbell for investment purposes.
B. express an opinion as to whether the financial report is prepared in accordance with an applicable financial reporting
framework.
C. make a 100% examination of Campbell's records.
D. certify the correctness of Campbell's financial report.
14. The essence of a financial report audit is to:
A. examine individual transactions so that the auditor may certify as to their validity.
B. detect fraud.
C. assure the consistent application of correct accounting procedures.
D. determine whether the client's financial reports are fairly stated.
15. The independent auditor adds credibility to the client's financial report by:
A. testifying under oath about client financial information.
B. attaching an auditor's opinion to the client's financial report.
C. maintaining a clear-cut distinction between management's representations and the auditor's representations.
D. stating in the auditor’s communication of internal control related matters that the audit was made in accordance with
Australian auditing standards.
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Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
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