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AUDITING ONLINE TEST

1. A limitation of an audit is caused by:

a. The nature of financial reporting.

b. The nature of audit procedures

c. The need for the audit to be conducted within a reasonable period of time and at a reasonable cost

d. All of the above

2. Which of the following is NOT true about Corporate Social Responsibility assurance?

a. Reporting is voluntary and is becoming more widespread.

b. Includes both financial and non-financial information.

c. Is required to be performed by an auditor.

d. Disclosures include environmental, employee and social reporting

3. Auditor independence is:

a. Defined as acting with integrity, objectivity and professional scepticism.

b. Essential when complying with the ethical principles to act with integrity and objectivity

c. Both answer A and B

d. Not fundamental to every audit

4. Having policies and procedures to ensure the quality of an accounting firm's service is an example of a safeguard to independence created by:

a. The client's audit committee

b. The Corporations Act

c. The client's board of directors

d. None of the above

5. Corporate governance means:

a. The viability of a company to remain in business for the foreseeable future

b. The rules, systems and processes within companies used to guide and control them

c. An intentional act through the use of deception to obtain an unjust or illegal advantage

d. The processes used by a client when finalising the accounts for an accounting period

6. Which of the following statements is correct about audit risk?

a. It is impossible to completely eliminate audit risk.

b. Audit risk is the risk that an auditor expresses an inappropriate opinion when a financial report is materially stated

c. Audit risk can be

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