University of Tasmania

BFA 713

AUDIT 713 -MCQ SUMMARY

CHAPTER 01

1)Which of the following is not an element of an assurance engagement?

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:
3. Who is the responsible party for the adequacy of the disclosure in the financial report and accompanying footnotes?
4. At what levels can assurance be provided under the assurance services framework?
5. Independent auditors are referred to as ‘independent’ because:
6. The highest level of assurance is provided by:
7. Which of the following can be the underlying subject matter of the audit?
8. To which assurance engagements does the Framework for Assurance Engagements apply?
9. 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:
10. 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?
11. Independent auditors perform audits on the financial reports of public companies. This type of auditing can best be described as:
12. 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:
13. The essence of a financial report audit is to:
14. The independent auditor adds credibility to the client’s financial report by:
15. Financial report auditing can best be described as:
16. Which of the following is not one of the fundamental principles underlying the objective of an audit?
17. Which of the following is not one of the fundamental principles underlying the objective of an audit?
18. Which of the following statements is not true concerning assurance services?
19. Which of the following is not an attribute of an external auditor?
20. Which of the following is not one of the fundamental principles of professional ethics underlying an audit?
21. Which of the following is not one of the fundamental principles of professional ethics underlying an audit?
22. The primary responsibility for the adequacy of disclosures in the financial report of a publicly held company rests with:
23. The accuracy of information included in notes that accompany the audited financial report of a company whose shares are traded on a stock exchange is the primary responsibility of:
24. The value of an assurance service lies in its ability to:
25. In the context of agency theory, information asymmetry refers to the idea that:
26. The public has turned to auditors to provide assurance services primarily because:
27. Which of the following best describes why an independent auditor is asked to express an opinion on the true and fair presentation of a
28. Which of the following is considered to be an enhancing characteristic of financial information that has been audited?
29. Which of the following best describes the reason why an independent auditor reports on financial statements?
30. Below are a number of potential additional benefits arising from an assurance service:

1. recommendations to improve the efficiency of operations.
2. a positive influence on the behaviour of people whose activities are being assured.
3. recommendations to improve the effectiveness of operations.

Which combination of these is identified in the book as additional benefits?

31. When an auditor expresses an opinion on the financial report, the auditor’s responsibilities extend to:
32. It is very hard for auditors to remain independent of their clients, given that they are paid by their clients. Below are a number of possible mechanisms:

1. ethical rules.
2. approved auditing standards.
3. audit committees.