Auditing and Assurance Services
Exam Solutions
Course Introduction
Auditing and Assurance Services introduces students to the principles and practices of auditing, with a focus on both external and internal audit functions in contemporary organizations. The course explores the regulatory environment, professional standards, ethical frameworks, and the role of auditors in providing assurance on financial and non-financial information. Students learn about audit planning, risk assessment, evidence gathering, internal controls, and the formulation of audit opinions. Real-world case studies and practical exercises are used to develop skills in critical evaluation, analytical reasoning, and the effective communication of audit findings. This course prepares students for professional auditing roles and emphasizes the relevance of assurance services in enhancing the credibility of financial reporting.
Recommended Textbook
Accounting Information Systems Understanding Business Processes 4th Edition by Brett Considine
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16 Chapters
947 Verified Questions
947 Flashcards
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Chapter 1: Systems Fundamentals
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57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/65590
Sample Questions
Q1) Which of the following is unlikely to be the accounting's role to an organisation?
A)Gather data about the organisation's activities.
B)Provide a means for business data storage and processing.
C)Convert business data into useful information.
D)Exercise strategic decision-making according to accounting information.
Answer: D
Q2) Data Mining is:
A)a technology that is used by large multinational resource companies such as BHP,Rio Tinto and Xstrata
B)declining in popularity with companies due to the emergence of newer technologies.
C)a technology that analyses small pools of internally generated data and identifies possible cost savings.
D)a technology that analyses large pools of data and identifies patterns in them that can then be used by organisations for decision making.
Answer: D
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3
Chapter 2: Systems Characteristics and Considerations
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Sample Questions
Q1) Which of the following statements is NOT true about a reengineered process?
A)Jobs change and people are empowered.
B)Work units change from a functional to a process perspective.
C)Controls are increased to ensure smooth functioning.
D)Workers jobs are combined and workers are given decision rights.
Answer: C
Q2) An emphasis on business processes is different to a functional perspective of the organisation because a business process emphasis:
A)Offers highly defined tasks and responsibilities.
B)Gives employees the freedom to do what they want in order to please the customer.
C)Acknowledges cross-functional communication and action is essential to the customer's needs.
D)Views the customer needs as secondary to those of the functional divisions. Answer: C
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Chapter 3: Database Concepts I
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60 Flashcards
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Sample Questions
Q1) Data can be described as:
A)the same as information.
B)the raw facts relating to or describing an event
C)the primary output of an AIS.
D)more useful than information.
Answer: B
Q2) Data redundancy:
A)can lead to a number of data anomalies
B)is useful in ensuring the integrity of data.
C)provides a useful backup function in a database.
D)none of the options are correct.
Answer: A
Q3) Information is:
A)the same as data.
B)data that is processed in a meaningful form
C)Less useful than data.
D)raw facts describing an event.
Answer: B
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5
Chapter 4: Database Concepts II
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Sample Questions
Q1) The attitude of businesses towards using REA to implement accounting systems is best described as:
A)Keen
B)Positive
C)Reluctant
D)Negative
Q2) Which of the following combination regarding the client-server architecture is correct?
A)A thin client with a fat server
B)A thin client with a thin server
C)A fat client with a fat server
D)Any combination of thin and fat clients and servers is fine.
Q3) For more convenient and quicker structuring,manipulating or reporting,one can:
A)Pursue the highest normal form possible through normalisation.
B)Eliminate data redundancies.
C)Leave the repeating groups as they are.
D)Create controlled redundancies via lower forms of normalisation.
Q4) When is an enterprise model ready for database implementation?
Q5) What is primary key? How can we design a good primary key?
Q6) Discuss the three major components of the client-server architecture.
Page 6
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Chapter 5: XBRL Reporting
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Sample Questions
Q1) The first country to formally require XBRL for public company financial reporting was:
A)Canada
B)the United States
C)China
D)Brazil
Q2) Describe the five linkbases associated with XBRL.
Q3) XBRL allows meanings to be embedded within strings of financial data.This meaning is conveyed by:
A)Embedding tags that identify where separate pieces of data start and end within strings of data.
B)Embedding comments at the end of the strings of data.
C)Specifying the meaning of data at the schema document.
D)Having a set of internationally agreed meanings assigned to specific types of data.
Q4) What does extensibility mean in XBRL? Discuss.
Q5) Explain how accounts can be tagged using XBRL.
Q6) Discuss the use of XBRL in Australia.
Q7) List and describe at least four benefits provided by XBRL.
Q8) Explain the concept of continuous auditing.
Page 7
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Chapter 6: System Mapping and Documentation
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Sample Questions
Q1) A typical structured narrative table contains descriptions for:
A)Entities,inputs,processes,and outputs
B)Entities,inputs,outputs,and feedbacks
C)Internal entities,external entities,systems,feedbacks
D)Inputs,processes,and outputs
Q2) When business process re-engineering needs to be done,which of the following should be considered as an essential first step? (i)how the existing process operates (ii)identifying the activities that occur and the people involved (iii)the parts of the organisation that interact with the process (iv)identify the trail of data that moves through the process (v)model key competitors existing business process.
A)(i)(ii)(iii)(iv)(v)
B)(i)(ii)(iii)(iv)
C)(i)(ii)(iv)
D)(i)(ii)(iii)(v)
Q3) ________ are graphical representations of where data flows within a system?
A)system flowcharts
B)process flow diagrams
C)data flow diagrams
D)none of the options are correct
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Page 8
Chapter 7: Internal Controls I
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Sample Questions
Q1) To which of the following risks are organisations that depend on the Internet for trading through e-commerce particularly vulnerable.
A)risk of network disruption
B)risk of key suppliers moving to other organisations
C)risk of new competitors taking market position
D)risk of unauthorised access to online systems
Q2) Into which stage would providing backup and disaster recovery procedures fit?
A)COBIT stage Acquiring
B)COBIT stage Delivering
C)COSO stage Control Environment
D)COSO stage Monitoring
Q3) Describe the merits and nature of audit committees.
Q4) What are the four main objectives of IT governance?
Q5) The internal control structure of the ERM does NOT include:
A)Internal environment
B)External environment
C)Event identification
D)Information and communication
Q6) Briefly explain the four areas of IT governance.
Q7) List and discuss four typical advantages of cloud computing.
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Chapter 8: Internal Controls II
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Sample Questions
Q1) A purchase order is entered into a computer purchasing system.The purchase is for $25 000 and has been entered by the purchase clerk.Company policy dictates that purchases over $2000 must be entered by the purchasing manager.This is an example of a breach of controls relating to:
A)Timeliness
B)Input accuracy
C)Input validity
D)Authorisation
Q2) Checking customer details before finalising a sales order is an example of a ________ control.
A)input
B)general
C)processing
D)performance
Q3) Briefly describe and compare input control,processing control,and output control.
Q4) What are the advantages and disadvantages of computer-based controls?
Q5) Briefly describe and compare preventive control,detective control,and corrective control.
Q6) Briefly describe and compare general controls and application controls.
Page 10
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Chapter 9: Transaction Cycle The Revenue Cycle
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Sample Questions
Q1) Describe and discuss the front end of the revenue cycle,especially its objectives.
Q2) An invoice is created for each valid sale by basing on:
A)Price information and inventory information
B)Customer data and sales order
C)Sales request and price information
D)Customer data and inventory information
Q3) Which document triggers the picking of goods?
A)Sales order only
B)Picking ticket only
C)Either sales order or picking ticket
D)Neither sales order nor picking ticket
Q4) Which of the following information is needed to determine the creditworthiness of a customer?
A)Credit limit.
B)Credit availability.
C)Details of recent sales that are not yet recorded in the customer's accounts receivable account.
D)All of the options are correct.
Q5) Why is the revenue cycle strategically important?
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Chapter 10: Transaction Cycle The Expenditure Cycle
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Sample Questions
Q1) Goods received data cannot be used to:
A)Investigate the list of items received from suppliers.
B)Update the inventory status of relevant goods
C)Verify invoice validity during the accounts payable phase.
D)Investigate the details of open purchase orders.
Q2) Which of the following is NOT a KPI that can be used to evaluate the objective "To ensure payments made to suppliers are both timely and accurate"?
A)Number of purchases from approved suppliers.
B)Financial delegations compliance.
C)Average payment time.
D)Number of supplier complaints.
Q3) Describe the objectives of the purchasing phase of the expenditure cycle and how these objectives can be achieved.
Q4) What are the risks associated with the purchasing phase when it is not correctly managed?
Q5) Describe the objectives of the accounts payable phase of the expenditure cycle and how these objectives can be achieved.
Q6) What are the risks associated with the purchasing phase when it is not correctly managed?
Page 12
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Chapter 11: Transaction Cycle The Production Cycle
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60 Flashcards
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Sample Questions
Q1) Which of the following does not concern inventory management?
A)FMS
B)Agile manufacturing
C)JIT
D)CAD
Q2) Forecasted demand for products can be received from the revenue cycle,where it is calculated based on previous sales history.This document is called:
A)production forecast report
B)demand forecast report
C)work order
D)None of the options are correct.
Q3) What are the two systems that are closely associated with inventory maintenance?
A)FMS and JIT
B)CAD and CAM
C)ABC and JIT
D)ABC and CAM
Q4) Explain why the production cycle is strategically important to a manufacturing organisation.
Q5) What is the objective of the planning phase in the production cycle?
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Chapter 12: Transaction Cycle The HR Management and Payroll Cycle
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Sample Questions
Q1) Which of the following can be used as a KPI to measure the objective of "Accurately calculate and disburse salary and wage payments"?
A)Volume and value of employee overpayments detected.
B)Volume and value of employee underpayments detected.
C)Salary and wage expenditure variances.
D)All of the options are correct.
Q2) The inability to retain existing staff members leads to: (i)limitation of the skill sets available to the organisation (ii)expensive staff replacements (iii)disruptive staff replacements (iv)severe legal consequences.
A)(i)(iv)only
B)(i)(ii)only
C)(ii)(iii)only
D)(i)(ii)(iii)(iv)
Q3) What are the basic functions of the payroll phase in the HR management and payroll cycle and what is its objective? Explain.
Q4) What are the typical risks encountered during performance review and what are the possible control measures?
Q5) Briefly explain how a performance review is done and the persons involved.
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Chapter 13: Transaction Cycle The General Ledger and Financial Reporting Cycle
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Sample Questions
Q1) The general ledger and financial reporting cycle ends when:
A)no more data are received from other cycles
B)budgets are created
C)financial reports have been generated and distributed
D)budget variances are examined
Q2) What are the key considerations when setting budget targets?
Q3) Which of the following technologies can be used in the general ledger and financial reporting cycle?
A)ERP and XBRL
B)ERP and CAD
C)RFID and XBRL
D)CAD and RFID
Q4) The main risk attached to producing financial reports is:
A)unauthorised distribution of financial reports
B)unauthorised access of financial reports
C)reporting incorrect data
D)reporting too many data
Q5) Give examples of different budget levels and explain any deficiencies that may associate with these levels.
Q6) What are the considerations when planning budget breakdown? Page 15
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Page 16
Chapter 14: Systems Development
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Sample Questions
Q1) Explain the systems development steering committee's role in selecting the most feasible alternative of systems development.
Q2) Briefly explain the five stages of systems development lifecycle.
Q3) Which of the following descriptions regarding critical path analysis/PERT charts is true?
A)The first step in preparing a PERT chart is assigning time estimates to each activity.
B)The illustration of the relationship comes before the calculation of earliest start time and latest finish time.
C)The identification of any slack comes before the calculation of earliest start time and latest finish time.
D)Assigning time estimates to each activity comes after the identification of any slack.
Q4) The knowledge about how the business operates,what is done and who does it is:
A)Technical skill
B)People skill
C)Operation skill
D)Process skill
Q5) What are the two perspectives of system design? Explain.
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Chapter 15: Auditing of Accounting Information Systems
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Sample Questions
Q1) A firm can only provide reasonable assurance that:
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.
Q2) AUASB stands for:
A)AUstralian Auditing Standards Board
B)AUditing and Assurance Standards Board
C)AUstralian Accounting Standards Board
D)AUditing and Accounting Standards Board
Q3) How does running test data through the system impose limitations on the auditors?
Q4) Can best practices be used during auditing? If so,how?
Q5) The risk of material misstatement,without regard to the effects of controls,is:
A)An inherent risk
B)A control risk
C)A detection risk
D)An incontrollable risk
Q6) What are the five phases of an AIS audit?
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Chapter 16: Ethics, fraud and Computer Crime
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Sample Questions
Q1) What are the three ways of gathering information of users of an accounting information system? What are the associated ethical concerns?
Q2) Which of the following is not a type of Consequentialist theory?
A)Ethical utilitarianism
B)Ethical Kantianism
C)Ethical egoism
D)Ethical altruism
Q3) The implicit rules that guide us in our everyday behaviour,thoughts and actions are collectively termed:
A)Ethics
B)Morals
C)Code of conduct
D)Legislation
Q4) Which of the privacy principles covers the requirement that information should be protected from loss and unauthorised access?
A)Collection of information
B)Record keeping
C)Storage
D)Access
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