Question 1

The primary purpose of a compliance audit is to determine whether the overall financial statements are in compliance with generally accepted accounting principles.

Accepted Answer

The primary purpose of a compliance audit is to determine whether an organization is following laws, regulations, and internal policies and procedures. While the audit may review financial statements to ensure compliance, this is not the primary focus.

Question 2

The primary purpose of a performance audit is to evaluate whether an organisation is complying with its operating procedures and methods.

Accepted Answer

The primary purpose of a performance audit is to evaluate whether an organisation is achieving its goals and objectives effectively and efficiently, not just whether it is complying with its operating procedures and methods. Compliance audits specifically focus on whether an organisation is adhering to its policies and procedures.

Question 3

Since 2004 the Corporations Act has provided for the issuance of auditing standards by the Auditing and Assurance Standards Board.

Accepted Answer

The statement is true. As per the Corporations Act since 2004, the Auditing and Assurance Standards Board (AUASB) has been responsible for setting auditing standards in Australia.

Question 4

To do an audit, it is necessary for there to be information in a verifiable form and some criteria by which the auditor can evaluate the information. (A) What information and criteria would an independent public accounting firm use when auditing a company's financial statements? (B) What information and criteria would a taxation auditor use when auditing that same company's tax return? (C) What information and criteria would an internal auditor use when performing a performance audit to evaluate whether the company's computerised payroll processing system is operating efficiently and effectively?

Accepted Answer

The answer of To do an audit, it is necessary...

Question 5

Discuss the impact of e- commerce on public accountants.

Accepted Answer

The answer of Discuss the impact of e- commerce on...

Question 6

Two types of attestation services provided by public accounting firms are audits and reviews. Discuss the similarities and differences between these two types of attestation services. Which type provides the most assurance?

Accepted Answer

The answer of Two types of attestation services provided by...

Question 7

Public accounting firms are not allowed to provide bookkeeping services for audit clients.

Accepted Answer

The answer of Public accounting firms are not allowed to...

Question 8

Discuss the differences and similarities between the roles of accountants and auditors. What additional expertise must an auditor possess beyond that of an accountant?

Accepted Answer

The answer of Discuss the differences and similarities between the...

Question 9

Discuss the similarities and differences between financial statement audits, performance (operational) audits and compliance audits. Give an example of each type.

Accepted Answer

The answer of Discuss the similarities and differences between financial...

Question 10

Discuss the similarities and differences between the roles of independent auditors, officers serving the Auditor- General, taxation auditors and internal auditors.

Accepted Answer

The answer of Discuss the similarities and differences between the...

Question 11

An attestation service is a type of assurance service in which the public accounting firm issues a written communication that expresses a conclusion about the reliability of a written assertion of another party.

Accepted Answer

This statement accurately describes an attestation service.

Question 12

Information risk increases as business organisations become larger.

Accepted Answer

As business organisations become larger, they tend to have more complex information systems, more data to manage, and more employees who have access to sensitive information. This complexity and scale increase the likelihood of information risk events such as data breaches, malicious attacks, and human error. Therefore, information risk generally increases as a business organization grows in size.

Question 13

Completion of Client Evaluation forms is an example of the quality control objective of Ethical Requirements.

Accepted Answer

Completion of Client Evaluation forms is primarily related to monitoring and improving service quality rather than directly addressing ethical requirements. Ethical requirements typically involve maintaining professional behavior, confidentiality, and integrity.

Question 14

The criteria used by an external auditor to evaluate published financial statements are known as generally accepted auditing standards.

Accepted Answer

The answer of The criteria used by an external auditor...

Quiz 1: Demand for Audit and Assurance Services