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Chapter 01 Testbank
Student: ___________________________________________________________________________
1. Which of the following is not an element of an assurance engagement?
A. Three-party
relationship.
B. Approved assurance
standards.
C. Sufficient appropriate
evidence.
D. A written assurance
report.
2. An audit establishes the conformity of assertions with specified criteria. In an audit of a financial report, the criteria by
which financial report assertions are judged are:
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A. the ethical rules of
conduct.
B. Australian Auditing
Standards.
C. listing rules of the Australian Securities and Investments
Commission.
D. applicable accounting
standards.
3. Who is the responsible party for the adequacy of the disclosure in the financial report and accompanying notes?
A. Auditor in charge of
fieldwork.
B. The entity's board of
directors.
C. Auditor who signs the auditor's
report.
D. The Australian Securities and Investments
Commission.
1-1
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
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4. At what levels can assurance be provided under the assurance services framework?
A. Reasonable assurance and limited
assurance.
B. High assurance and reasonable
assurance.
C. Assurance can be provided on a continuum from 0% to
100%.
D. Assurance can be provided on a continuum from absolute to
limited.
5. Independent auditors are referred to as ‘independent' because:
A. their offices are not at the entity's place of
business.
B. they are not employees of the entity being
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audited.
C. they are paid by parties outside of the audited
entity.
D. they report to users outside of the audited
entity.
6. The highest level of assurance is provided by:
A. compiling financial
reports.
B. agreed-upon
procedures.
C. review
.
D. audit
.
7. Which of the following can be the underlying subject matter of the audit?
A. The financial report of a
company.
B. The Australian accounting
standards.
C. The Australian auditing
standards.
D. The auditor's
report.
1-2
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
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8. To which assurance engagements does the Framework for Assurance Engagements apply?
A. Audits of historical financial
information.
B. Reviews of historical financial
information.
C. Assurance engagements other than audits or reviews of historical financial
information.
D. All of the given answers are
correct.
9. What is a direct engagement?
A. The assurance provider is directly appointed by the
responsible party.
B. The auditor directly measures or evaluates the underlying subject matter against
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the criteria.
C. Shareholders directly appoint the auditor, rather than the
company.
D. The assurance engagement contains both financial report and performance
engagement elements.
10. The auditor's judgment concerning the overall fairness of the presentation of financial position, results of operations
and cash flows is applied within the framework of:
A. Australian auditing standards that include the concept of
materiality.
B. quality
control.
C. the agreed reporting
framework.
D. the auditor's assessment of the audited entity's level of
control risk.
1-3
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
primedocs primedocs
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,primedocs
Chapter 01 Testbank
Student: ___________________________________________________________________________
1. Which of the following is not an element of an assurance engagement?
A. Three-party
relationship.
B. Approved assurance
standards.
C. Sufficient appropriate
evidence.
D. A written assurance
report.
2. An audit establishes the conformity of assertions with specified criteria. In an audit of a financial report, the criteria by
which financial report assertions are judged are:
primedocs
A. the ethical rules of
conduct.
B. Australian Auditing
Standards.
C. listing rules of the Australian Securities and Investments
Commission.
D. applicable accounting
standards.
3. Who is the responsible party for the adequacy of the disclosure in the financial report and accompanying notes?
A. Auditor in charge of
fieldwork.
B. The entity's board of
directors.
C. Auditor who signs the auditor's
report.
D. The Australian Securities and Investments
Commission.
1-1
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
primedocs primedocs
,primedocs
4. At what levels can assurance be provided under the assurance services framework?
A. Reasonable assurance and limited
assurance.
B. High assurance and reasonable
assurance.
C. Assurance can be provided on a continuum from 0% to
100%.
D. Assurance can be provided on a continuum from absolute to
limited.
5. Independent auditors are referred to as ‘independent' because:
A. their offices are not at the entity's place of
business.
B. they are not employees of the entity being
primedocs
audited.
C. they are paid by parties outside of the audited
entity.
D. they report to users outside of the audited
entity.
6. The highest level of assurance is provided by:
A. compiling financial
reports.
B. agreed-upon
procedures.
C. review
.
D. audit
.
7. Which of the following can be the underlying subject matter of the audit?
A. The financial report of a
company.
B. The Australian accounting
standards.
C. The Australian auditing
standards.
D. The auditor's
report.
1-2
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
primedocs primedocs
, primedocs
8. To which assurance engagements does the Framework for Assurance Engagements apply?
A. Audits of historical financial
information.
B. Reviews of historical financial
information.
C. Assurance engagements other than audits or reviews of historical financial
information.
D. All of the given answers are
correct.
9. What is a direct engagement?
A. The assurance provider is directly appointed by the
responsible party.
B. The auditor directly measures or evaluates the underlying subject matter against
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the criteria.
C. Shareholders directly appoint the auditor, rather than the
company.
D. The assurance engagement contains both financial report and performance
engagement elements.
10. The auditor's judgment concerning the overall fairness of the presentation of financial position, results of operations
and cash flows is applied within the framework of:
A. Australian auditing standards that include the concept of
materiality.
B. quality
control.
C. the agreed reporting
framework.
D. the auditor's assessment of the audited entity's level of
control risk.
1-3
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
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