Exam (elaborations)

ACCT3000 Auditing Mock Final Exam Paper PART A: MULTIPLE CHOICE QUESTIONS

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Module
Unit 6 - Financial Accounting (ACCT3000)

Institution
Pearson (PEARSON)

1. An adverse opinion is most likely to be appropriate when there is: a. a scope limitation. b. a misstatement confined to a specific item. c. a disagreement with those charged with governance which is material and pervasive. d. inconsistent other information. 2. Your client, Blunt Ltd, is be...

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acct3000 auditing mock final exam paper

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ACCT3000 Auditing MOCK
End of Semester 1, 2018
ACCT3000 Auditing Mock Final Exam Paper
PART A: MULTIPLE CHOICE QUESTIONS (25 MARKS)

ANSWER ALL QUESTIONS. EACH QUESTION IS WORTH 1 MARK.

Part A consists of twenty-five (25) multiple-choice questions. On the General
Purpose Answer Sheet provided, please indicate the answer you believe to
the best response to each multiple-choice question.

1. An adverse opinion is most likely to be appropriate when there is:
a. a scope limitation.
b. a misstatement confined to a specific item.
c. a disagreement with those charged with governance which is material
and pervasive.
d. inconsistent other information.

2. Your client, Blunt Ltd, is being sued by one of its competitors for $20 million
for an alleged patent infringement. Your client has assets of $40 million and a
reported profit of $10 million. The client has disclosed the lawsuit in a note to
the accounts along with a statement indicating that they intend to vigorously
defend the suit and are confident of winning the suit. Your independent legal
advice supports this view and you are satisfied with the details provided by the
client in the notes to the accounts. What type of opinion should you express on
the financial report of Blunt Ltd?
a. An unmodified opinion with an Emphasis of Matter.
b. A disclaimer of opinion.
c. An unmodified opinion.
d. A qualified opinion or adverse opinion.

3. Which of the following bodies monitors the operation of the Auditing and
Assurance Standards Board?
a. Financial Reporting Council.
b. Companies Auditors and Liquidators Disciplinary Board.
c. Australian Securities Exchange.
d. All of the given answers are correct.

4. Independence is t h e c o r n e r s t o n e of the auditing profession. Which o f
t h e following is self-review threat?
a. a guarantee from an officer of an assurance client.
b. p e r f o r m i n g services for an assurance client that directly affects
the subject matter of the assurance engagement.
c. long association of a senior member of an assurance team with the
audit client.
d. pressure to reduce inappropriately the extent of work performed in
order to reduce fees.

Page 1 of 10

, End of Semester 1, 2018
ACCT3000 Auditing Mock Final Exam Paper
5. Your audit client is under intense pressure to meet an earnings target. Which
transaction assertion for purchases are you most concerned with?
a. Occurrence.
b. Completeness.
c. Classification.
d. Accuracy.

6. The audit test that would normally be regarded as a test of control is:
a. enquiries of third parties.
b. test of the specific items making up the balance in a given general ledger
account.
c. test of the additions to property, plant, and equipment by physical
inspections.
d. test of the signatures on purchase orders to a list of approved
signatories.

7. Which of the following procedures would an auditor most likely rely on to
verify management's assertion of completeness?
a. Comparing a sample of shipping documents to related sales invoices.
b. Reviewing a standard bank confirmation.
c. Confirming a sample of recorded receivables by direct communication with
the debtors.
d. Observing the client's distribution of payroll cheques.

8. In assessing independence, a firm may do which of the following?
a. decline the engagement due to a lack of independence.
b. circulate the name of a prospective client to staff to identify any
relationships inconsistent with independence.
c. complete a professional independence questionnaire.
d. all of the above.

9. Which of the following is NOT an ethical consideration for the auditor
in deciding to accept an audit engagement?
a. ensure their scheduling process allows completion on time.
b. evaluate circumstances that would compromise independence.
c. assessing competence to perform the audit.
d. determine their ability to use due care in performing the audit.

10. For a particular assertion, control risk is the risk that:
a. a material misstatement will occur in the accounting process.
b. audit procedures will fail to detect a weak control system.
c. control procedures will not detect a material misstatement that occurs.
d. the prescribed control procedures will not be applied uniformly.

Page 2 of 10

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Exam (elaborations)

ACCT3000 Auditing Mock Final Exam Paper PART A: MULTIPLE CHOICE QUESTIONS

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