Question 1

Peer reviews of public sector audit offices are normally directed by:&#10;A) the Prime Minister/Premier.&#10;B) the Treasurer/Minister for Finance.&#10;C) public accounts committees.&#10;D) specific legislative requirements.

Accepted Answer

Peer reviews of public sector audit offices are directed by specific legislative requirements. This is because the legislative requirements provide the legal framework and guidelines for conducting audits which ensures the independence of audit offices and helps maintain public accountability.

Question 2

In a compliance audit, which of the following matters is the auditor primarily concerned about?&#10;A) Whether the financial report is fairly presented in accordance with the identified financial reporting framework.&#10;B) Whether the entity has achieved its stated objectives.&#10;C) Whether the entity has followed the relevant requirements applicable to it.&#10;D) Whether the entity has operated in the most economic and efficient manner.

Accepted Answer

In a compliance audit, the auditor's primary concern is whether the entity has followed the relevant requirements applicable to it, such as laws, regulations, contracts or internal policies. The focus is not on the presentation of financial information or achievement of objectives, or operability in a specific manner.

Question 3

Public sector entities are required to prepare financial reports based on:&#10;A) cash accounting.&#10;B) accrual accounting.&#10;C) fund accounting.&#10;D) All of the given answers are correct.

Accepted Answer

Public sector entities are required to prepare financial reports based on accrual accounting. This method of accounting matches revenues and expenses when they are incurred, regardless of when the cash is received or paid out. This provides a more accurate picture of the entity's financial condition and performance. Cash accounting and fund accounting are also used by public sector entities, but accrual accounting is the primary method of financial reporting.

Question 4

Governmental auditing often extends beyond examinations leading to the expression of an opinion on the fairness of financial presentation and includes audits of efficiency and effectiveness, and:&#10;A) internal control.&#10;B) evaluation.&#10;C) accuracy.&#10;D) compliance.

Accepted Answer

Governmental auditing includes audits of compliance to ensure that the organization is following laws, regulations, and policies that are relevant to their operations. Efficiency and effectiveness audits evaluate whether resources are being used appropriately and achieving the intended results. Internal control audits assess the adequacy of the system of internal controls put in place to safeguard assets, ensure accurate financial reporting, and compliance with laws and regulations. Accuracy audits focus on the correctness and completeness of financial information or other data that the organization generates. However, the question asks for the extension of audits, and compliance is the most fitting option as it often goes beyond financial reporting to check adherence to various applicable laws and regulations.

Question 5

It is not a primary purpose of a performance audit to provide:&#10;A) a means of assurance that internal controls are functioning as planned.&#10;B) a measure of management performance in meeting organisation goals.&#10;C) the results of internal examinations of financial and accounting matters to a company's top-level management.&#10;D) an aid to the external auditor who is conducting the examination of the financial report.

Accepted Answer

Performance audits focus on assessing the efficiency, effectiveness, and economy of operations, rather than aiding external auditors in examining financial reports.

Question 6

Government activities may be carried out through:&#10;A) government departments.&#10;B) statutory authorities.&#10;C) companies.&#10;D) All of the given answers are correct.

Accepted Answer

All of the given choices are correct. Government activities may be carried out through government departments, statutory authorities, and companies. The choice of the specific type of entity used will depend on the nature and purpose of the activity to be carried out.

Question 7

Which of the following is an example of improved effectiveness?&#10;A) Greater outputs from the same inputs.&#10;B) Rationalisation of facilities.&#10;C) Introduction of charges where none previously existed.&#10;D) An increase in the percentage of streets rated as having a satisfactory level of cleanliness and appearance in terms of a city's street maintenance program.

Accepted Answer

An increase in the percentage of streets rated as having a satisfactory level of cleanliness and appearance in terms of a city's street maintenance program demonstrates improved effectiveness as it shows that the program is achieving its intended goal of maintaining the cleanliness and appearance of streets.

Question 8

What is the main concern of performance auditing?&#10;A) Compliance with relevant laws and regulations.&#10;B) Probity.&#10;C) Financial report attest auditing.&#10;D) Efficiency, economy and effectiveness.

Accepted Answer

The main concern of performance auditing is to evaluate whether the organization being audited is operating with efficiency, economy, and effectiveness. It focuses on assessing how well resources are being utilized to accomplish goals and objectives, and whether there is room for improvement in the performance of the organization. Compliance with laws and regulations and probity (integrity and ethical behavior) are important considerations in any type of auditing, but they are not the primary focus of performance auditing. Financial report attest auditing is a separate type of auditing that focuses specifically on the accuracy and completeness of financial statements.

Question 9

The proposed annual expenditures of the Commonwealth Government are authorised by:&#10;A) the Auditor-General.&#10;B) the Treasurer.&#10;C) the Department of Finance.&#10;D) the Parliament.

Accepted Answer

The proposed annual expenditures of the Commonwealth Government are authorised by the Parliament through the Appropriation Bills. Therefore, option D - the Parliament - is the best choice. The other options are not responsible for authorizing the government's proposed annual expenditures. The Auditor-General is responsible for auditing the government's financial statements, the Treasurer is responsible for managing the government's finances, and the Department of Finance assists the Treasurer in performing their duties.

Question 10

Which of the following statements best describes the term 'outcomes' in a performance audit?&#10;A) Number of units produced.&#10;B) Service provided by a particular government program.&#10;C) Consequences for the community of the government program.&#10;D) Economy and efficiency of resources used in achieving outputs.

Accepted Answer

Outcomes refer to the consequences or impacts of a government program or activity on the community. It assesses the success or effectiveness of the program in achieving its intended goals and impact on the community. Option A, B, and D refer to outputs, services, or efficiency of resources used in achieving the outputs, which are not the same as outcomes.

Question 11

Which of the following statements best describes the term 'efficiency'?&#10;A) A reduction in costs through better contracting.&#10;B) Clarifying objectives and policies.&#10;C) Greater outputs from the inputs.&#10;D) Rationalisation of facilities.

Accepted Answer

The answer of Which of the following statements best describes...

Question 12

A determination of cost savings is most likely to be an objective of a:&#10;A) regularity audit.&#10;B) compliance audit.&#10;C) performance audit.&#10;D) financial audit.

Accepted Answer

The answer of A determination of cost savings is most...

Question 13

The Auditor-General is appointed by:&#10;A) the Governor-General.&#10;B) the Parliament.&#10;C) the Public Service Board.&#10;D) the Minister of Finance

Accepted Answer

The answer of The Auditor-General is appointed by:&#10;A) the Governor-General.&#10;B)...

Question 14

Why should the public sector performance auditor be concerned with avoiding commenting on government policy?&#10;A) Any comment will undermine the public's confidence in the government of the day.&#10;B) Government policy does not affect the performance of the entity.&#10;C) The merits of government policy are matters for political debate and for decision by the executive government.&#10;D) A risk may arise in that the official opposition may use the audit report to criticise the government.

Accepted Answer

The answer of Why should the public sector performance auditor...

Question 15

What problem arises if the relationship between cause and effect is not determined in a performance audit?&#10;A) The impact on the financial report cannot be determined.&#10;B) The audit cannot proceed.&#10;C) The criteria cannot be established.&#10;D) A recommendation cannot be made to address the cause of the problem.

Accepted Answer

The answer of What problem arises if the relationship between...

Question 16

A typical objective of a performance audit is for the auditor to:&#10;A) determine whether the financial report presents the entity's operations fairly.&#10;B) evaluate the feasibility of attaining the entity's operational objectives.&#10;C) make recommendations for improving performance.&#10;D) report on the entity's relative success in attaining profit maximisation.

Accepted Answer

The answer of A typical objective of a performance audit...

Question 17

Which of the following can be considered an example of a performance indicator for effectiveness?&#10;A) A reduction in the number and severity of injuries, resulting from a road safety program.&#10;B) The number of patients treated in a health clinic.&#10;C) A decline in caseloads for social workers.&#10;D) The costs of a job training program for long-term unemployed, per person placed in permanent employment.

Accepted Answer

The answer of Which of the following can be considered...

Question 18

Governmental auditing includes:&#10;A) financial report auditing.&#10;B) performance auditing.&#10;C) compliance auditing.&#10;D) All of the given answers are correct.

Accepted Answer

The answer of Governmental auditing includes:&#10;A) financial report auditing.&#10;B) performance...

Question 19

Why is it important to establish performance audit criteria?&#10;A) They are a basis for communication with management.&#10;B) They indicate the scope of the performance audit.&#10;C) They are a basis for developing audit programs and questionnaires.&#10;D) All of the given answers are correct.

Accepted Answer

The answer of Why is it important to establish performance...

Question 20

In reporting performance audit findings, why does an auditor evaluate evidence against criteria?&#10;A) To ensure reasonable criteria have been established.&#10;B) To develop conclusions relative to the audit objectives.&#10;C) To develop the audit scope.&#10;D) To determine risk.

Accepted Answer

The answer of In reporting performance audit findings, why does...

Question 21

Which of the following examples is a compliance audit in relation to a government department?&#10;A) Reporting to the minister on the tendering process for the construction of the department's new office block.&#10;B) Reporting on the department's financial report to be presented to Parliament.&#10;C) Reporting to the minister as to whether the department has met the objectives set out in its mission statement.&#10;D) Reporting to the minister as to whether members of the department have followed the government travel guidelines.

Accepted Answer

The answer of Which of the following examples is a...

Deck 15: Auditing and Assurance Services in the Public Sector