Question 1

Why the auditing of systems under development is favourable?

Accepted Answer

A strong case can be made for auditors t...

Question 2

What are the five general infrastructure controls of a system that need to be evaluated during an audit?

Accepted Answer

Logical access controls
Databa...

Question 3

The risk of material misstatement resulting from the internal controls in place failing to detect a fraudulent or erroneous transaction is:

Accepted Answer

A)  An inherent risk
B)  A control risk
C)  A detection risk
D)  An incontrollable riskE) All of the above
F) B) and D)

Question 4

The objective of financial audit is to:

Accepted Answer

A)  enable the auditor to express an opinion as to whether the financial report is prepared in accordance with all applicable financial reporting frameworks.
B)  enable the auditor to express an opinion as to whether the financial report is prepared in accordance with an applicable financial reporting framework.
C)  enable the auditor to express an opinion as to whether the financial report is prepared in accordance with an applicable accounting standard.
D)  enable the auditor to express an opinion as to whether the financial report is prepared in accordance with all applicable accounting standards.E) A) and C)
F) A) and B)

Question 5

Which of the following is not a responsibility of the Board,Audit Committee and Management?

Accepted Answer

A)  Formulate overall risk classifications.
B)  Understand business life cycles,business processes,and critical success factors.
C)  Identify and classify risks.
D)  Assess probability of risk and potential consequences.E) C) and D)
F) A) and B)

Question 6

Sarbanes-Oxley Act (SOX) has legal force on which of the following?

Accepted Answer

A)  US companies
B)  Companies that are dual listed on a US stock exchange
C)  Subsidiaries of US companies
D)  All the aboveE) A) and B)
F) A) and C)

Question 7

The examination of financial reports to form a view independently from the organisation as to the reliability of the information provided in the reports is referred to as:

Accepted Answer

A)  A financial audit.
B)  An internal audit.
C)  An external audit.
D)  An information audit.E) A) and D)
F) All of the above

Question 8

Briefly explain the three types of risk associated with a risk-based approach to AIS audit.

Accepted Answer

Inherent Risk - the susceptibility of an...

Question 9

A firm can only provide reasonable assurance that:

Accepted Answer

A)  The firm and its personnel comply with AUASB Standards
B)  The firm and its personnel comply with relevant ethical requirements.
C)  The firm and its personnel comply with applicable legal and regulatory requirements.
D)  All of the options are correct.E) A) and D)
F) B) and D)

Question 10

The purpose of an audit is to:

Accepted Answer

A)  Give shareholders a guarantee that the financial statements are correct
B)  Give stakeholders a guarantee that the financial statements are correct
C)  Enhance the degree of confidence of intended users in the financial report
D)  None of the options are correctE) None of the above
F) B) and C)

Question 11

Non-compliance with Accounting Concepts and Standards is:

Accepted Answer

A)  sometimes required
B)  deemed appropriate only in extreme circumstances
C)  unprofessional conduct
D)  All of the options are correct.E) A) and D)
F) All of the above

Question 12

The relationship between internal auditing function and the organisation's external auditors can be described as:

Accepted Answer

A)  Competing
B)  Substitutive
C)  Enhancing
D)  CloseE) A) and C)
F) A) and B)

Question 13

Failing to detect a fraudulent or erroneous transaction is an example of which type of risk?

Accepted Answer

A)  Control
B)  Inherent
C)  Detection
D)  CompletenessE) A) and C)
F) A) and B)

Question 14

Can best practices be used during auditing? If so,how?

Accepted Answer

Auditors often need other sources of gui...

Question 15

What are the main responsibilities of an audit committee?

Accepted Answer

An independent audit committee is a fund...

Question 16

ASA 700 Forming an Opinion and Reporting on a Financial Report does not outline the auditor's responsibilities of:

Accepted Answer

A)  The auditor's report should state that the audit was conducted in accordance with international accounting standards.
B)  The audit should be described including procedures on how evidence was obtained.
C)  The auditor's report should state that the audit was conducted in accordance with Australian accounting standards.
D)  The auditor's report states that the auditor believes that sufficient and appropriate audit evidence was obtained to form an opinion.E) B) and C)
F) A) and D) A

Question 17

The control risk associated with manual reviews of computer logs is:

Accepted Answer

A)  High
B)  Medium
C)  Low
D)  NegligibleE) B) and D)
F) B) and C)

Question 18

Which of the following statements regarding computer auditing tools and techniques is true?

Accepted Answer

A)  An embedded audit software is a simper version of an integrated test facility.
B)  A more sophisticated example of embedded audit software is continuous auditing using a systems control and review file.
C)  Generalised audit software examines transactions dynamically.
D)  Generalised audit software is not very flexible.E) B) and D)
F) A) and D)

Question 19

In Australia and New Zealand,ASX guidelines encourage the appointment and evaluation of performance of external auditors to be carried out by:

Accepted Answer

A)  Chief Executive Officer (CEO) 
B)  Board of directors
C)  Audit committee
D)  Chief Financial Officer (CFO) E) None of the above
F) All of the above C

Question 20

The risk that an error that could occur in an audit area and could be material,individually or in combination with other errors,will not be prevented or detected and corrected on a timely basis by the internal control system is:

Accepted Answer

A)  Inherent risk
B)  Control risk
C)  Detection risk
D)  Incontrollable riskE) A) and D)
F) A) and C) B

Exam 15: Auditing of Accounting Information Systems

Why the auditing of systems under development is favourable?

Correct AnswerverifiedA strong case can be made for auditors t...View AnswerShow Answer

What are the five general infrastructure controls of a system that need to be evaluated during an audit?

Correct AnswerverifiedLogical access controlsDataba...View AnswerShow Answer

The risk of material misstatement resulting from the internal controls in place failing to detect a fraudulent or erroneous transaction is:

Correct AnswerverifiedShow Answer

The objective of financial audit is to:

Correct AnswerverifiedShow Answer

Which of the following is not a responsibility of the Board,Audit Committee and Management?

Correct AnswerverifiedShow Answer

Sarbanes-Oxley Act (SOX) has legal force on which of the following?

Correct AnswerverifiedShow Answer

The examination of financial reports to form a view independently from the organisation as to the reliability of the information provided in the reports is referred to as:

Correct AnswerverifiedShow Answer

Briefly explain the three types of risk associated with a risk-based approach to AIS audit.

Correct AnswerverifiedInherent Risk - the susceptibility of an...View AnswerShow Answer

A firm can only provide reasonable assurance that:

Correct AnswerverifiedShow Answer

The purpose of an audit is to:

Correct AnswerverifiedShow Answer

Non-compliance with Accounting Concepts and Standards is:

Correct AnswerverifiedShow Answer

The relationship between internal auditing function and the organisation's external auditors can be described as:

Correct AnswerverifiedShow Answer

Failing to detect a fraudulent or erroneous transaction is an example of which type of risk?

Correct AnswerverifiedShow Answer

Can best practices be used during auditing? If so,how?

Correct AnswerverifiedAuditors often need other sources of gui...View AnswerShow Answer

What are the main responsibilities of an audit committee?

Correct AnswerverifiedAn independent audit committee is a fund...View AnswerShow Answer

ASA 700 Forming an Opinion and Reporting on a Financial Report does not outline the auditor's responsibilities of:

Correct AnswerverifiedA

The control risk associated with manual reviews of computer logs is:

Correct AnswerverifiedShow Answer

Which of the following statements regarding computer auditing tools and techniques is true?

Correct AnswerverifiedShow Answer

In Australia and New Zealand,ASX guidelines encourage the appointment and evaluation of performance of external auditors to be carried out by:

Correct AnswerverifiedC

The risk that an error that could occur in an audit area and could be material,individually or in combination with other errors,will not be prevented or detected and corrected on a timely basis by the internal control system is:

Correct AnswerverifiedB

Correct Answer
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A strong case can be made for auditors t...
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Logical access controls
Databa...
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Inherent Risk - the susceptibility of an...
View Answer

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Correct Answer
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Correct Answer
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Auditors often need other sources of gui...
View Answer

Correct Answer
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An independent audit committee is a fund...
View Answer

Correct Answer
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A

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C

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B