This Study Resource Was: A Client Would Not

Session 5 quiz
1.Knowledge of the entity's financing activities includes understanding the entity's:
a.debt structure.
b. inventory management policies
c.location of property, plant and equipment.
d.all of the above
2.When assessing the industry conditions of a client, which of the following would not
normally be assessed?
a.the market for the client's products.
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b.competitors.
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c.price competition.
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d.economy-wide factors. rs e
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3.Which of these would not be of direct interest to an auditor who was obtaining knowledge
of the entity's business operations?
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a.method of obtaining revenues.

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b.employment.
c.stock exchange listing requirements

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d.transactions with related parties.

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4.In accepting an engagement, an auditor takes on professional responsibilities to:

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a.the public.
b.the client.
c.the client and the public.
d.the public, the client, and other members of the profession.
5. Which of the following is not normally found in the audit engagement letter?
a.a disclaimer on detecting all material irregularities.
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b.the objective or purpose of the audit.
c.a space for the client's approving signature.
d.the use of binding arbitration in the case of a dispute 在發生爭議的情況下，使用具有約

束力的仲裁
6.Before accepting an engagement, the auditor should identify special circumstances and
unusual risks. Which of these conditions is not directly part of a review of such a
circumstance or risk?
a.reviewing industry and economic data.
b.identifying intended users of the audited financial statements.
c.assessing a prospective 預期 client's legal and financial stability.
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d.evaluating the entity's auditability.
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7.Which of these steps in planning the audit is out of sequence 失序?
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a.obtaining an understanding of the entity's internal control structure.
b.obtaining an understanding of the entity and its environment.

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c.making preliminary judgements about materiality levels.

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d.considering the audit risk

ed d
8. In assessing independence, an audit firm may do which of the following?

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a.decline the engagement due to a lack of independence.
b.circulate the name of a prospective client to staff to identify any relationships inconsistent
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with independence.
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c.complete a professional independence questionnaire.
d. all of the above.
9.Which of the following is not a consideration in the planning phase of the audit?
a.obtaining an understanding of the entity's business and industry.
b.assessing competence to perform the audit.
c.considering audit risk.
d.making preliminary judgements about materiality levels.
10.A common fee structure for audit engagements is:
a.fixed fee from a tendering process.
b.contingent fee.
c.daily charge-out rates plus expenses.
d.out-of-pocket plus normal profit.
When obtaining knowledge about the entity's objectives and strategies and the related
business risks, an auditor should consider:
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industry developments.
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new products and services.
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expansion of the business.
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all of the above. rs e
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The auditor should regularly evaluate clients in respect of specified events to determine
whether to continue the relationship. Which of the following is not a specified event that
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should prompt an evaluation?

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the expiration of a time period.

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a significant change in the business.

a change in the audit partner.
the existence of conditions that would lead that auditor to reject a client had those
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conditions existed at the time of the initial acceptance of the audit engagement.
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All of the following are ways in which an auditor can assess the integrity of management
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except:
arranging a police search on the police confidential data base
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making enquiries of third parties.

communicating with the previous auditor.
considering previous experience with the client's management
The main purpose of the audit engagement letter is to:

avoid litigation.
confirm the terms of the engagement(expected answer).
outline the cost of the audit
all of the above.
Which of these would not be part of a typical audit team?

an audit partner.
an audit manager.
internal auditors.
an audit senior.
Concerning errors, irregularities and illegal acts, the auditor should plan the audit with an
attitude of:
cautious mistrust.
seasoned pessimism.
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professional scepticism.
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adversarial pursuit
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In the investigation of a potential new client, if the client refuses to give permission to
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inquire of the existing auditor, or if the existing auditor does not respond fully, the
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prospective auditor should:
consider the implications in making the acceptance or rejection decision.
not accept the engagement.
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request a CPA Australia/ICAA-sanctioned peer review of the predecessor.

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request assistance from the ASIC.
The reliance on client internal audit personnel on the audit is:

strictly prohibited by professional standards.
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acceptable whenever a client has employed them.

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acceptable if the auditor reviews and tests their work.

acceptable if the auditor re-performs all their work.
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Which of these best describes the auditor's planning responsibilities concerning related
parties?
review procedures for identifying related parties.
identify the existence of related parties
obtain a list of all board members and place in the working papers.
investigate the background of all related parties.
The initial phase of a financial statement audit involves the acceptance decision for the
client in question. Which of the following is not a consideration during this phase of the
audit:
ethical considerations.
client evaluation.
preparation of the engagement letter.
determining the existence of related parties.
In the investigation of a potential new client, besides inquiring of the existing auditor, the
prospective auditor should make inquires of other third parties. Which of the following is
least likely to be included in this inquiry?
legal advisers/solicitors.
bankers.
customers.
the chamber of commerce.
商會
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Which of these is not an ethical consideration for the auditor in deciding whether to accept
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an audit engagement?
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identifying intended users of the audited financial statements.
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evaluate circumstances that would compromise their independence.
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assessing their competence to perform the audit.
determine their ability to use due care in performing the audit.
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Which of these is not an example of an expert as defined by ASA 620 (ISA 620)?
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actuaries.
internal auditors.
Appraisers 鑑定人
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all are examples of experts as defined by ASA620/ISA620

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The least likely source of information for the auditor in obtaining an understanding of the
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client's industry conditions is:

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industry Audit Guides.

trade journals.
industry statistics compiled by government or private agencies.
data accumulated by the audit firm
Setting materiality levels, assessing audit risk and its components and obtaining an
understanding of the internal control structure are all part of which audit stage?
client evaluation.
audit planning.
collecting audit evidence
issuing the audit report.
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Session 5 quiz

1.Knowledge of the entity's financing activities includes understanding the entity's:

b. inventory management policies

c.location of property, plant and equipment.

d.all of the above

a.the market for the client's products.

a.method of obtaining revenues.

c.stock exchange listing requirements

d.transactions with related parties.

4.In accepting an engagement, an auditor takes on professional responsibilities to:

c.the client and the public.

d.the public, the client, and other members of the profession.

a.a disclaimer on detecting all material irregularities.

c.a space for the client's approving signature.

d.the use of binding arbitration in the case of a dispute 在發生爭議的情況下，使用具有約

a.reviewing industry and economic data.

b.identifying intended users of the audited financial statements.

c.assessing a prospective 預期 client's legal and financial stability.

b.obtaining an understanding of the entity and its environment.

c.making preliminary judgements about materiality levels.

d.considering the audit risk

8. In assessing independence, an audit firm may do which of the following?

a.decline the engagement due to a lack of independence.

c.complete a professional independence questionnaire.

d. all of the above.

a.obtaining an understanding of the entity's business and industry.

b.assessing competence to perform the audit.

c.considering audit risk.

10.A common fee structure for audit engagements is:

a.fixed fee from a tendering process.

c.daily charge-out rates plus expenses.

d.out-of-pocket plus normal profit.

should prompt an evaluation?

the expiration of a time period.

a significant change in the business.

making enquiries of third parties.

The main purpose of the audit engagement letter is to:

Which of these would not be part of a typical audit team?

request a CPA Australia/ICAA-sanctioned peer review of the predecessor.

request assistance from the ASIC.

The reliance on client internal audit personnel on the audit is:

acceptable whenever a client has employed them.

acceptable if the auditor reviews and tests their work.

all are examples of experts as defined by ASA620/ISA620

client's industry conditions is:

industry Audit Guides.

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