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University of Tasmania BFA 713 CHAPTER 3 1)Which of the following statements is correct? Ethics require: knowledge of moral principles

Accounting

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1. 1. 1. 20. Emma Jones is about to begin a recurring annual audit engagement. As the continuing auditor, her independence would ordinarily be considered to be impaired if the previous year’s audit fee:
         21. It would not be appropriate for the auditor to initiate discussion with the audit committee concerning:
         22. Rebecca Lane was offered the engagement to audit Beachside Ltd for the year ended 30 June 20X2. She had served as a director of Beachside Ltd until 30 June 20X0 and her spouse currently owns 1000 of the 10 000 outstanding shares of Beachside Ltd. She should:
         23. Under APES 110, an auditor may not:
         24. The ethical rules state that independence of the external audit firm is considered to be impaired if:
         25. An auditor strives to achieve independence in appearance to:
         26. One of the partners in your audit firm holds one per cent of the shares in an audit client. This is not material to the partner’s wealth. This is a breach of:
         27. Which of the following circumstances would not be considered by the Australian Securities and Investments Commission (ASIC) to be ‘exceptional’ for them to allow the auditor of a public company to resign outside of the company’s annual general meeting?
         28. Bernard & Associates has audited the financial report of Basset Pty Ltd (Basset) for several years and had always been paid promptly for services rendered. Last year’s audit invoices have not been paid because Basset is experiencing cash flow difficulties and the current year’s audit is scheduled to commence in one week. With respect to the past due audit fees, Bernard & Associates should:
         29. In which of the following instances would the independence of the auditor most likely not be considered to be impaired?
         30. You are the auditor of Express Travel Ltd, a large travel agent that also handles all your audit firm’s travel arrangements on normal commercial rates and provides excellent service. The chief financial officer of Express Travel Ltd has asked if you could help them overcome an economic downturn by recommending their services to your other audit clients. However, he has also said that he will understand if you are not able to do so. What type of threat to your independence does this request constitute?
         31. You are the auditor of Blue Haze Ltd and are nearing the completion of the audit work for the current year when the audit senior, Travis Dean, advises you that he has been offered a job at Blue Haze Ltd as soon as the current audit is finished. What type of threat to the auditor’s independence does this situation constitute?
         32. You are the auditor of Speed Ltd and the chief financial officer has stated that he is concerned that you are taking up too much of his staff’s time asking unnecessary questions for the audit. Further, he has indicated that your chances of getting the engagement to review the implementation of their new computer system engagement will be greatly improved if you keep your questioning of staff to a minimum during the current audit. What type of threat to your independence does this situation constitute?
         33. Audit firm rotation has been introduced:
         34. APES 110 would be violated if an auditor accepted a fee for services and the fee was:
         35. An acceptable audit fee arrangement is to:
         36. When a bid price for audit services by an audit firm is quoted at an unreasonably low level to win the tender, with any unrecovered audit costs recovered subsequently through other services or by other means, it is called:
         37. Which of the following best describes the role of corporate governance?
         38. Corporate governance procedures generally involve policies concerning which of the following matters?
             1. Compensation arrangements for senior management and non-executive directors.
             2. Ensuring the board of directors is composed of persons with an appropriate mix of skills and experience.
             3. Nomination of and communication with the external auditors.
             4. All of the given answers are correct.
         39. The audit committee of a publicly held company should be made up of:
         40. Which of the following is not a requirement of the ASX Corporate Governance Council Principles and Recommendations?
         41. The external auditor will normally report to the audit committee on all the following matters except:
         42. Which of the following is not one of the key areas covered by the OECD Principles of Corporate Governance?