Lecture 1 – Chapter 1 all

Expect to obtain c the chairperson of

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Unformatted text preview: g trial balance b) A document adjusting and reclassifying entries c) Audit programs for the client d) Audit firm’s long- term plans Q 2. Preliminary work on a time budget for an audit often is involved with: a) Estimating the expected hours required at each staff level b) Identifying the change- out rates at each staff level c) Estimating total costs by charge- out rates at each staff level d) All of the above Q 3. Before using an expert in another profession or occupation, the auditors should be satisfied as to all of the following, except: a) Professional qualifications of the expert b) Reputation of the expert c) That the expert has a close a relationship with the firm being audited d) All of the above Q 4. Which of these ethical requirements in regard to non- auditing services procided to audit clients by auditors is not prescribed in the Corporations Act 2001? a) Auditors are prevented from performing more than $1000 of non- audit services for their client. b) The auditor must give a written declaration to the directors that there has been no contravention of auditor independence c) If a conflict of interest arises the auditor must take all reasonable steps to ensure than conflict of interest ceases to exist d) If an auditor plays a significant role in the audit of a listed company for 5 successive years, the individual is not eligible to play a significant role for at least 2 successive years Q 5. The greatest opportunities for fraudulent financial reporting exist with: a) Ineffective monitoring of management b) Complex transactions and accounting estimates that are difficult to corroborate c) A high degree of competition within the industry being audited d) Using a partnership form of organization rather than the company form Q 6. The decision to accept an audit engagement requires the auditor engagement requires the auditor to undertake a client evaluation. Client evaluation involves: a) Consideration of management’s integrity b) Identifying any special circumstances and unusual risks associated with the entity c) Reviewing the auditing and accounting standards d) Both a and b Q 7. For most engagements, the auditor makes a preliminary visit to the entity before its year end. This visit is referred to as the: a) Interim audit b) P...
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This document was uploaded on 09/17/2013.

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