Lecture 1 – Chapter 1 all

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Unformatted text preview: include the cancellation or suspension of an auditor’s registration All of the above are true Q 11. The term that best describes any situation where information is prepared by one party and them attested to its accuracy by another party is: a) b) c) d) Audit Assurance Insurance Assertion Q 12. Auditing bears what relationship to assurance? a) b) c) d) The are different names for the same thing Auditing is a sub-category of assurance Assurance is a sub-category of auditing Firms of accountants carry out auditing engagements but not assurance engagements Q 13. Over the years professional accounting bodies have assisted the practice of auditing by: a) b) c) d) Developing auditing standards Self-regulating quality of service Maintaining educational qualifications All of the above Q 14. Currently the accounting profession is the ones primarily responsible for which of the following? The setting of auditing and accounting standards is now under government control; ASIC is now mainly responsible for the regulation of accountants involved in corporate reporting. The accounting profession now has ongoing responsibility for maintaining standards of educational qualifications, ongoing professional development and ethical standard setting. a) b) c) d) Auditing and accounting standard setting The regulation of accountants and auditors involved in corporate reporting Maintaining standards of educational qualifications All of the above Q 15. Which of these is not one of the ‘Big 4’ accounting firms? a) b) c) d) Deloittes Emst & Young Arthur Anderson KPMG Q 16. Auditing in its very early days was associated with which of the following? a) b) c) d) Detection of fraud Checking of all or most transactions Trust in management’s assertions All of the above Q 17. In which famous auditing case was the phrase ‘reasonable skill and care’first used? a) b) c) d) Kingston Cotton Mill Pacific Acceptance Caparo Industries Chandler case Q 18. In recent years which of these has had the least influence on auditing practice? a) b) c) d) Auditing standards Case law Greater regulation Company law Q 19. The factor that is unlikely to affect the independence of an external auditor is: a) b) c) d) Non-audit work undertake for an audit client An ineffective internal auditor How easily the auditor’s position can be terminated The time period that the auditor has acted for the client Q 20. In relation to changes to auditing regulation it is true that: a) The Sarbanes-Oxley reforms in the USA are principle-based b) The CLERP reforms in Australia are more rules-based than the Sarbanes-Oxley reforms c) The Sarbanes-Oxley reforms are more rules based and the CLERP reforms are more principlesbased d) The CLERP reforms and the the Sarbanes-Oxley reforms are very similar in approach Q 21. Which of these is said to have contribution to the litigation crisis in auditing? a) b) c) d) Agency theory Information hypothesis Insurance hypothesis None of the above Q 22. Even if there we...
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This document was uploaded on 09/17/2013.

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