Test Bank for Modern Auditing and Assurance Services 6th Edition by Philomena Leung (Author), Paul Coram (Author), Barry J. Cooper (Author), Peter Richardson (Author) (All Chapters Covered) (Complete Guide with answers) (Graded A+)

TEST BANK FOR
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MODERN AUDITING nn




AND ASSURANCE
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SERVICES, 6TH
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EDITION, PHILOMENA
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LEUNG, PAUL CORAM,
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BARRY J. COOPER,
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PETER RICHARDSON
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, Table of Contents nn nn




Part 1 THE AUDITING AND ASSURANCE ENVIRONMENT 2
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1 An overview of auditing 4
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2 Governance and the auditor 44 nn nn nn nn




3 Professional ethics, independence and audit quality 94
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4 Other assurance engagements and quality standards 162
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5 The auditor’s legal liability 202
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Part 2 AUDIT PLANNING 246
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6 Overview of the audit of financial reports 248
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7 The auditor’s report 280
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8 Client evaluation and planning the audit 314
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9 Audit risk assessment 366
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10 Materiality and audit evidence 414 nn nn nn nn




Part 3 AUDIT TESTING METHODOLOGY 452
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11 Tests of controls 454
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12 Designing substantive procedures 488
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13 Audit sampling 526 nn nn




Part 4 AUDITING TRANSACTIONS AND BALANCES 566
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14 Auditing sales and receivables 568
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15 Auditing purchases, payables and payroll 618
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16 Auditing inventories and property, plant and equipment 664
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17 Auditing cash and investments 708
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Part 5 COMPLETING THE AUDIT 756
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18 Completing the audit 758 nn nn nn

,Chapter 1: An overview of auditing
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Multiple-choice questions nn




1. The three major professional accounting bodies in Australia are:
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a. ICAA, CPA and ASIC. nn nn nn


b. CPA Australia, IPA and AARF.
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c. ATO, AUASB and ASIC. nn nn nn


d. ICAA, CPA Australia and IPA. nn nn nn nn




The correct option is d.
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Learning objective 1.1 ~ explain what an audit is, what it provides, and
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why it is demanded.
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2. Which of these is not an objective of the ASIC?
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a. To maintain, facilitate and improve the performance of companies.
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b. To establish new institutional arrangements for standard setting.
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c. To receive, process and store information given to the
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Commission under the laws.
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d. All of the above are objectives of the ASIC.
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The correct option is b.
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Learning objective 1.1 ~ explain what an audit is, what it provides, and
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why it is demanded.
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3. Which of the following is true regarding auditors and
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fraud? nn


a. Auditors are required to detect all fraud during annn nn nn nn nn nn nn nn


audit. nn


b. Auditors should actively investigate the possibility of fraud if
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suspicious circumstances exist.
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c. In the Kingston Cotton Mill case it was said that the audit role
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was not primarily to detect fraud.
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d. b. and c. are true.
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The correct option is d.
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Learning objective 1.1 ~ explain what an audit is, what it provides, and
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why it is demanded.
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, 4. Which of these was not an Australian corporate collapse?
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a. Harris Scarfe. nn


b. HIH Insurance Ltd. nn nn


c. One.Tel.
d. All were Australian corporate collapses.
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The correct option is d.
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Section 1.1 Auditing fundamentals
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5. ABC firm are the auditors of XYZ
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for the audit has recently spent
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paid consultant on their internal
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principle that has been breached
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a. auditor competence. nn


b. auditor rotation. nn


c. auditor independence. nn


d. auditor appointment. nn




The correct option is c.
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Learning objective 1.1 ~ explain what an audit is, what it provides, and
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why it is demanded.
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6. Which of these is not a reform introduced by CLERP 9 in relation to
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Auditors and annual general meetings (AGMs)?
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a. Shareholders can submit written questions to the auditor before
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the AGM relating to the auditor’s report and the conduct
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of the audit.
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b. The auditor must attend the AGM.
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c. The auditor must address the AGM.
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d. A reasonable opportunity must be allowed for members as a
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whole to ask questions of the auditor and for the auditor to
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respond. nn




The correct option is c.
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Learning objective 1.1 ~ explain what an audit is, what it provides, and
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why it is demanded.
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