Question 1

Which of the following was not identified in a research study by Hargroves and Smith as a principle of sustainable development?
A)Equal opportunity.
B)Ensuring intergenerational equity.
C)Conservation of biodiversity.
D)All were identified as principles of sustainable development.

Accepted Answer

D

Question 2

An assurance engagement as compared to a non-assurance engagement, requires:
A)an opinion to be provided.
B)a positive not a negative opinion.
C)the assurance practitioner to reduce the assurance risk to a level that is appropriate to the engagement.
D)all of the above are required.

Accepted Answer

A

Question 3

A forensic audit in an organisation with an electronic environment may feature:
A)investigating employee emails and addresses, log-on times and messages.
B)searching for duplicate numbers of payments or receipts.
C)scanning lists of suppliers.
D)all of the above.

Accepted Answer

A forensic audit in an organization with an electronic environment may feature all of the above options. Investigating employee emails and addresses, log-on times and messages can help identify any fraudulent or suspicious activity within the organization's electronic communication system. Searching for duplicate numbers of payments or receipts can uncover any irregularities in the organization's financial transactions. Scanning lists of suppliers can assist in identifying any potential conflicts of interest or other fraudulent activities related to procurement. Therefore, all of the above options can be part of a comprehensive forensic audit in an electronic environment.

Question 4

Performance engagements investigate:
A)compliance with regulations and contractual obligations.
B)the causes and effects of possible fraudulent activities.
C)the full range of organisational sustainability performance.
D)the economy, efficiency and effectiveness of business activities.

Accepted Answer

Performance engagements focus on assessing the economy, efficiency, and effectiveness of business activities to ensure optimal performance and resource utilization.

Question 5

According to a KPMG 2016 survey:
A)the dollar value of the typical fraud has increased.
B)the number of instances of detected fraud has increased.
C)the total dollar value lost to fraud has increased.
D)the total dollar value lost to fraud has decreased.

Accepted Answer

The total dollar value lost to fraud has increased.

Question 6

Auditors may be asked to give an audit opinion on only one part of a financial report based on historical financial information.These include all of the following except for:
A)a statement of financial position.
B)forecast information in support of a bank loan application.
C)accounts receivable.
D)provision for income taxes.

Accepted Answer

Forecast information is not based on historical financial data; it is forward-looking, whereas the other options are based on historical financial information.

Question 7

During a review of a financial report, the auditor would be least likely to:
A)read the financial report and consider its conformance with generally accepted accounting principles.
B)obtain reports from other accountants who reviewed a portion of the total entity.
C)obtain written confirmation from management regarding loans to officers.
D)perform analytical procedures designed to identify relationships that appear to be unusual.

Accepted Answer

The answer of During a review of a financial report,...

Question 8

When an auditor performs a review of an interim financial report which of the following steps would not be part of the review?
A)Review of ratios and trends.
B)Testing of the computer controls.
C)Reading the minutes of the shareholders' meetings.
D)Inquiry of management.

Accepted Answer

Testing of the computer controls is typically part of an audit, not a review of interim financial reports. A review is less extensive than an audit and focuses more on analytical procedures and inquiries.

Question 9

A negative opinion in a limited assurance engagement:
A)is not as strong an opinion as a positive opinion.
B)normally is not based on detailed substantive or control testing.
C)expresses the opinion that nothing has come to the attention of the practitioner to suggest that the outcome is not in compliance with the criteria.
D)all of the above are true concerning negative opinions.

Accepted Answer

In a limited assurance engagement, a negative opinion (also known as a review engagement) is indeed not as strong as a positive opinion (which is typically given in an audit), is generally not based on detailed testing of controls or substantive procedures, and expresses that nothing has come to the practitioner's attention that the financial statements are not in accordance with the applicable financial reporting framework. This makes all the provided statements true concerning negative opinions.

Question 10

It is incorrect that the Framework for Assurance Engagements:
A)is based on the International Framework issued by the IFAC.
B)defines and describes the elements of an assurance engagement.
C)shows the concepts of an assurance engagement.
D)establishes standards.

Accepted Answer

The Framework for Assurance Engagements does not establish standards but instead provides the concepts and principles that underpin assurance engagements. Standards are established separately by each jurisdiction or professional body. The other three options (A, B, and C) are correct statements about the Framework.

Question 11

The assurance engagement that the normal auditing standards (ASAs 100-799) apply to is:
A)an audit of annual general purpose financial reports.
B)a part only of a financial report, rather than the full report.
C)a summarised financial report.
D)they apply to all of the above.

Accepted Answer

The normal auditing standards (ASAs 100-799) specifically apply to audits of annual general purpose financial reports, as these standards are designed to ensure the accuracy and reliability of complete financial statements.

Question 12

Which of these is not an assurance engagement?
A)A review of historical financial information.
B)A performance audit.
C)A consulting engagement to help an organisation meet its tax obligations.
D)All are assurance engagements.

Accepted Answer

A consulting engagement to help an organisation meet its tax obligations is not an assurance engagement, as it does not involve providing an independent opinion or conclusion on the subject matter.

Question 13

A set of official guidelines published by the United Nations Environmental program is known as:
A)the Global Reporting Initiative.
B)the World Sustainability Guidelines.
C)triple bottom line reporting.
D)the AA1000 Assurance Standard.

Accepted Answer

The Global Reporting Initiative (GRI) is a set of guidelines developed to help organizations report on their environmental, social, and economic performance. It is associated with the United Nations Environmental Program.

Question 14

Which of these possible engagements by a firm with their accountants is an assurance engagement?
A)An assessment of the internal control system.
B)Preparing financial reports.
C)A management consulting service.
D)All are assurance engagements.

Accepted Answer

An assurance engagement involves evaluating and providing an opinion on the reliability of information, such as an assessment of the internal control system.

Question 15

In a continuous audit client information is released in a very short timeframe, and auditors' reports on that information follow the release almost immediately.One of the issues for auditors is:
A)there is enough time for the auditor to gather evidence.
B)the auditor cannot rely on normal audit procedures.
C)the auditor cannot use fully automated audit software.
D)the auditor cannot check the internal control system.

Accepted Answer

In a continuous audit, the release of client information happens in a short timeframe, which means there may not be enough time for auditors to rely on the normal audit procedures. Auditors need to develop and use specialized audit procedures that are tailored to the unique features of continuous auditing, which may require new software, tools, and techniques. Therefore, auditors cannot rely on normal audit procedures.

Question 16

The suitability of criteria is the basis on which the information about the subject matter is prepared and measured.It is normally based on:
A)relevance and reliability.
B)neutrality and completeness.
C)understandability.
D)all of the above.

Accepted Answer

The suitability of criteria is based on relevance, reliability, neutrality, completeness, and understandability.

Question 17

In research conducted by CPA Australia and the University of Sydney it was found that in Australia:
A)80% of companies in the private sector had their sustainability reports audited or verified.
B)just under 15% of companies in the private sector had their sustainability reports audited or verified.
C)60% of companies in the private sector had their sustainability reports audited or verified.
D)less than 25% of companies in the private sector had their sustainability reports audited or verified.

Accepted Answer

The answer of In research conducted by CPA Australia and...

Question 18

Under the Framework for Assurance Engagements which of these is one of the types of assurance engagements?
A)Partial assurance.
B)Absolute assurance.
C)Reasonable assurance.
D)All are types of assurance engagements.

Accepted Answer

Reasonable assurance is one of the two main types of assurance engagements, the other being limited assurance. Absolute assurance is not achievable due to inherent limitations.

Question 19

Evidence should be obtained for which of the following in a prospective financial information assurance engagement report (PFI) such as a forecast or projection?
A)That the assumptions used by management are appropriate.
B)That the PFI was prepared at the same time as the historical financial statements.
C)That the PFI gives a true and fair view.
D)Evidence should be obtained for all of the above.

Accepted Answer

In a prospective financial information assurance engagement, it is crucial to obtain evidence that the assumptions used by management are appropriate, as these assumptions form the basis of the forecast or projection.

Question 20

Performance engagements may give rise to:
A)limited assurance.
B)reasonable assurance.
C)either a or b.
D)limited assurance, reasonable assurance or complete assurance.

Accepted Answer

Performance engagements can provide either limited or reasonable assurance, depending on the scope and objectives of the engagement.

Quiz 4: Quality and Standards of Assurance Engagements

Which of the following was not identified in a research study by Hargroves and Smith as a principle of sustainable development?

An assurance engagement as compared to a non-assurance engagement, requires:

A forensic audit in an organisation with an electronic environment may feature:

Performance engagements investigate:

According to a KPMG 2016 survey:

Auditors may be asked to give an audit opinion on only one part of a financial report based on historical financial information.These include all of the following except for:

During a review of a financial report, the auditor would be least likely to:

When an auditor performs a review of an interim financial report which of the following steps would not be part of the review?

A negative opinion in a limited assurance engagement:

It is incorrect that the Framework for Assurance Engagements:

The assurance engagement that the normal auditing standards (ASAs 100-799) apply to is:

Which of these is not an assurance engagement?

A set of official guidelines published by the United Nations Environmental program is known as:

Which of these possible engagements by a firm with their accountants is an assurance engagement?

In a continuous audit client information is released in a very short timeframe, and auditors' reports on that information follow the release almost immediately.One of the issues for auditors is:

The suitability of criteria is the basis on which the information about the subject matter is prepared and measured.It is normally based on:

In research conducted by CPA Australia and the University of Sydney it was found that in Australia:

Under the Framework for Assurance Engagements which of these is one of the types of assurance engagements?

Evidence should be obtained for which of the following in a prospective financial information assurance engagement report (PFI) such as a forecast or projection?

Performance engagements may give rise to: