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{Topic 1} Assurance and auditing: an overview

Question 1: An audit establishes the conformity of assertions with specified criteria. In an audit of a financial report, the criteria by which financial report assertions are judged are:

(Learning objective 1: Understanding the assurance framework)

A: The Ethical Rules of the Audit Profession.

B: Australian Auditing Standards.

C: Listing Rules of the Australian Securities and Investments Commission.

D*: Applicable accounting standards.

Question 2: Which of the following is not an element of an assurance engagement?

(Learning objective 1: Understanding the assurance framework)

A: Three-party relationship

B*: Approved assurance standards

C: Suitable criteria

D: A written assurance report

Question 3: The auditor's judgment concerning the overall fairness of the presentation of financial position, results of operations, and cash flows is applied within the framework of:

(Learning objective 1: Understanding the assurance framework)

A: Australian Auditing Standards which include the concept of materiality.

B: Quality control.

C*: The identified reporting framework.

D: The auditor's assessment of the audited entity's level of control risk.

Question 4: To which assurance engagements does the Framework for Assurance Engagement apply?

(Learning objective 2: Understanding the structure of assurance standards and pronouncements)

A: Audits of historical financial information

B: Reviews of historical financial information

C: Assurance engagements other than audits or reviews of historical financial information

D*: All of the above.

Question 5: To which type of assurance engagement does the umbrella standard AUS 110 (ISAE 3000) “Assurance Engagements other than Audits and Reviews of Historical Financial Information”, not apply?

(Learning objective 2: Understanding the structure of assurance standards and pronouncements)

A: A performance audit on a government department

B*: A...