An Overview of Auditing
Chapter 1
An overview of auditing
Multiple Choice
1. The three major professional accounting bodies in Australia are:
a. ICAA, CPA and ASIC.
b. CPA Australia, NIA and AARF.
c. ATO, AUASB and ASIC.
d. ICAA, CPA Australia and NIA.
The correct option is d. Feedback: Section 1.3 The auditing environment
2. Which body has a mission ‘to develop, in the public interest, high-quality auditing and assurance standards and related guidance to enhance the relevance, reliability and timeliness of information provided to users of audit and assurance services’?
a. the IAASB.
b. the AASB.
c. the AUASB.
d. the FRC.
The corrects option is c. Feedback: Section 1.4 Auditing standards
3. Which of these is not an objective of the ASIC?
a. to maintain, facilitate and improve the performance of companies.
b. to establish new institutional arrangements for standard setting.
c. to receive, process and store information given to the Commission under the laws.
d. all of the above are objectives of the ASIC
The corrects option is b. Feedback: Section 1.3 The auditing environment
4. Which of the following is true regarding auditors and fraud?
a. auditors are required to detect all fraud during an audit.
b. auditors should actively investigate the possibility of fraud if suspicious circumstances exist
c. in the Kingston Cotton Mill case it was said that the audit role was not primarily to detect fraud
d. b. and c. are true
The correct option is d. Feedback: Section 1.3 The auditing environment
5. Which of these was not an Australian corporate collapse?
a. HIH Insurance Ltd.
b. One.Tel.
c. Harris Scarfe.
d. all were Australian corporate collapses
The correct option is d. Feedback: Section 1.1 Auditing fundamentals
6. ABC firm are the auditors of XYZ Company. The partner responsible for the audit has recently spent a week working with XYZ as a paid consultant on their internal control systems. The ethical principle that has been breached is:
a. auditor
An overview of auditing
Multiple Choice
1. The three major professional accounting bodies in Australia are:
a. ICAA, CPA and ASIC.
b. CPA Australia, NIA and AARF.
c. ATO, AUASB and ASIC.
d. ICAA, CPA Australia and NIA.
The correct option is d. Feedback: Section 1.3 The auditing environment
2. Which body has a mission ‘to develop, in the public interest, high-quality auditing and assurance standards and related guidance to enhance the relevance, reliability and timeliness of information provided to users of audit and assurance services’?
a. the IAASB.
b. the AASB.
c. the AUASB.
d. the FRC.
The corrects option is c. Feedback: Section 1.4 Auditing standards
3. Which of these is not an objective of the ASIC?
a. to maintain, facilitate and improve the performance of companies.
b. to establish new institutional arrangements for standard setting.
c. to receive, process and store information given to the Commission under the laws.
d. all of the above are objectives of the ASIC
The corrects option is b. Feedback: Section 1.3 The auditing environment
4. Which of the following is true regarding auditors and fraud?
a. auditors are required to detect all fraud during an audit.
b. auditors should actively investigate the possibility of fraud if suspicious circumstances exist
c. in the Kingston Cotton Mill case it was said that the audit role was not primarily to detect fraud
d. b. and c. are true
The correct option is d. Feedback: Section 1.3 The auditing environment
5. Which of these was not an Australian corporate collapse?
a. HIH Insurance Ltd.
b. One.Tel.
c. Harris Scarfe.
d. all were Australian corporate collapses
The correct option is d. Feedback: Section 1.1 Auditing fundamentals
6. ABC firm are the auditors of XYZ Company. The partner responsible for the audit has recently spent a week working with XYZ as a paid consultant on their internal control systems. The ethical principle that has been breached is:
a. auditor