Question 1

The working papers are:

Accepted Answer

A)   the property of client.
B)   the primary means of documenting that an adequate audit was conducted in accordance with auditing standards.
C)   property of the auditor although prepared by client.
D)   used primarily as a basis for the partners to review and reward the work of the managers, seniors and staff.E) A) and C)
F) A) and B)

Question 2

Public accounting firms must accept every audit engagement.

Accepted Answer

A) True 
 B)False

Question 3

Copies of the client's constitution and organisation chart are normally included in the permanent file of the auditor's working papers.

Accepted Answer

A) True 
 B)False

Question 4

Which one of the following is NOT a document or record that should be examined early in the engagement?

Accepted Answer

A)   Contracts
B)   Management letter
C)   Corporate constitution
D)   Minutes of board of directors' and shareholders' meetingsE) None of the above
F) B) and C)

Question 5

Distinguish between the type of data contained in auditors' permanent files compared to current files.

Accepted Answer

Permanent files contain data of a histor...

Question 6

Two major factors that affect acceptable audit risk are inherent risk and control risk.

Accepted Answer

A) True 
 B)False

Question 7

List the steps in planning an audit.

Accepted Answer

1. Accept clients and perform initial au...

Question 8

An auditor who accepts an audit engagement must gain an understanding of the client's industry and business. This includes knowledge of the:

Accepted Answer

A)   business operations and processes.
B)   industry and external environment.
C)   management and governance.
D)   all of the aboveE) All of the above
F) A) and B)

Question 9

Which of the following would NOT be a consideration of an audit firm in deciding whether to accept a new client?

Accepted Answer

A)   Client's relation with its previous audit firm
B)   Client's standing in the business community
C)   Client's financial stability
D)   Client's probability of achieving an unqualified opinionE) C) and D)
F) A) and C)

Question 10

The development of the audit program is the final stage in:

Accepted Answer

A)   documenting independence.
B)   audit planning.
C)   the engagement letter.
D)   the client acceptance decision.E) None of the above
F) All of the above

Question 11

Working papers can be viewed by different audit personnel simultaneously by using:

Accepted Answer

A)   statistical sampling software programs.
B)   Groupshare software programs.
C)   ACL.
D)   IDEA.E) None of the above
F) C) and D)

Question 12

ASA 220 contains:

Accepted Answer

A)   guidance regarding planning of an audit.
B)   quality control for an audit.
C)   audit evidence.
D)   analytical procedures to be undertaken in an audit.E) All of the above
F) B) and C)

Question 13

Working papers prepared by the client for the auditor are the property of the auditor.

Accepted Answer

A) True 
 B)False

Question 14

Most auditors assess inherent risk as high for related parties and related- party transactions because:

Accepted Answer

A)   of the lack of independence between the parties.
B)   of the accounting disclosure requirement.
C)   both A and B
D)   it is required by generally accepted accounting principles.E) A) and B)
F) None of the above

Question 15

When an auditor decides there is higher inherent risk for an account, one potential effect is that less audit evidence will be required for that account.

Accepted Answer

A) True 
 B)False

Question 16

The most likely uses of the financial statements can be determined from:

Accepted Answer

A)   previous experience with the auditee and discussions with management.
B)   inquiries with ASIC and the ASX.
C)   reviewing the terms of the engagement as set out in the engagement letter.
D)   reviewing the minutes of meetings.E) B) and C)
F) All of the above

Question 17

Under ASA 210, the engagement letter may state:

Accepted Answer

A)   an agreement on fees.
B)   an agreement to provide other services.
C)   An understanding as to the availability of reports on the Internet.
D)   all of the aboveE) B) and C)
F) A) and C)

Question 18

The objective of audit documentation is to provide reasonable assurance that an adequate audit was conducted.

Accepted Answer

A) True 
 B)False

Question 19

During the course of an audit engagement, an auditor prepares and accumulates audit working papers. The audit working papers should then be kept:

Accepted Answer

A)   until the end of seven years after the date of the audit report.
B)   until the client ceases to exist.
C)   for a period not exceeding three years.
D)   forever.E) B) and D)
F) B) and C)

Question 20

Which one of the following would you NOT expect to find in a company's constitution? Rules and procedures for:

Accepted Answer

A)   implementing internal control systems.
B)   issuing shares.
C)   calling general meetings.
D)   appointment and retirement of directors.E) All of the above
F) B) and C)

Exam 6: Audit Planning and Documentation

Copies of the client's constitution and organisation chart are normally included in the permanent file of the auditor's working papers.

Correct AnswerverifiedShow Answer

ASA 220 contains:

Correct AnswerverifiedShow Answer

The objective of audit documentation is to provide reasonable assurance that an adequate audit was conducted.

Correct AnswerverifiedShow Answer

Under ASA 210, the engagement letter may state:

Correct AnswerverifiedShow Answer

The working papers are:

Correct AnswerverifiedShow Answer

Working papers prepared by the client for the auditor are the property of the auditor.

Correct AnswerverifiedShow Answer

Which of the following would NOT be a consideration of an audit firm in deciding whether to accept a new client?

Correct AnswerverifiedShow Answer

When an auditor decides there is higher inherent risk for an account, one potential effect is that less audit evidence will be required for that account.

Correct AnswerverifiedShow Answer

Which one of the following is NOT a document or record that should be examined early in the engagement?

Correct AnswerverifiedShow Answer

Working papers can be viewed by different audit personnel simultaneously by using:

Correct AnswerverifiedShow Answer

Which one of the following would you NOT expect to find in a company's constitution? Rules and procedures for:

Correct AnswerverifiedShow Answer

The development of the audit program is the final stage in:

Correct AnswerverifiedShow Answer

During the course of an audit engagement, an auditor prepares and accumulates audit working papers. The audit working papers should then be kept:

Correct AnswerverifiedShow Answer

Public accounting firms must accept every audit engagement.

Correct AnswerverifiedShow Answer

The most likely uses of the financial statements can be determined from:

Correct AnswerverifiedShow Answer

Most auditors assess inherent risk as high for related parties and related- party transactions because:

Correct AnswerverifiedShow Answer

Distinguish between the type of data contained in auditors' permanent files compared to current files.

Correct AnswerverifiedPermanent files contain data of a histor...View AnswerShow Answer

An auditor who accepts an audit engagement must gain an understanding of the client's industry and business. This includes knowledge of the:

Correct AnswerverifiedShow Answer

List the steps in planning an audit.

Correct Answerverified1. Accept clients and perform initial au...View AnswerShow Answer

Two major factors that affect acceptable audit risk are inherent risk and control risk.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Permanent files contain data of a histor...
View Answer

Correct Answer
verified

Correct Answer
verified
1. Accept clients and perform initial au...
View Answer

Correct Answer
verified