Chapter 13: Auditing and governance of accounting information systems
Multiple-choice questions
1. Which of the following statements regarding the concept of audit is not true?
a. The most common type of audit is the financial statement audit.
b. The financial statement audit provides an objective opinion on an
organisation’s financial statements.
*c. Financial statement audit provides absolutely guarantee that the financial
reports are free of misstatement.
d. Auditing is a systematic process of objectively obtaining and evaluating
evidence regarding assertions about economic actions and events to ascertain
the degree of correspondence between those assertions and established criteria
and communicating those results to interested users.
Correct answer: c
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
2. The purpose of the financial statement audit is for users to be able to ascertain the
__________ and __________ of the financial statements of an organisation.
*a. credibility; reliability
b. trustworthiness; accuracy
c. correctness; objectivity
d. None of the options is correct.
Correct answer: a
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
3. The objective of financial audit is to:
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.
Correct answer: b
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
, Chapter 13: Auditing and governance of accounting information systems
4. Standards Australia has a risk management standard:
a. ASA 610.
b. ISO 9000.
*c. AS/NZS ISO 31000:2009.
d. none of the options are correct.
Correct answer: c
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
5. Which of the following is not a responsibility of the Board, Audit Committee and
Management?
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.
Correct answer: d
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
6. Which of the following is not a responsibility associated with audit assurance?
a. Compare and analyse risk tolerance and mitigation strategies.
b. Evaluate existing and new controls, costs and effectiveness of monitoring
procedures.
*c. Define objectives, scope and priorities.
d. Assess exposure, report position and recommend insurance (if necessary).
Correct answer: c
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
13.1
, 7. Which of the following statements regarding internal auditing is not true?
a. Internal auditing can improve an organisation’s operations by providing
guidance for management decisions.
b. Internal auditing can improve an organisation’s operations by providing
guidance for more efficient business operations.
*c. Internal auditing is a subjective assurance and consulting activity designed to
add value and improve an organisation’s operations.
d. Internal auditing is undertaken by professionals who evaluate and improve an
organisation’s risk management, control and governance processes to add
value to the organisation.
Correct answer: c
Learning objective 13.2 – summarise the role of internal audit.
8. Which of the following statements regarding the internal audit function is not true?
*a. The internal audit function is not all encompassing.
b. The internal audit function includes the evaluation of controls in business
processes.
c. The internal audit function includes the evaluation of controls in information
systems and systems development projects.
d. The internal audit function includes the evaluation of controls in systems
development projects.
Correct answer: a
Learning objective 13.2 – summarise the role of internal audit.
9. The relationship between internal auditing function and the organisation’s external
auditors can be described as:
a. competing.
b. substitutive.
c. enhancing.
*d. close.
Correct answer: d
Learning objective 13.2 – summarise the role of internal audit.
13.2
Multiple-choice questions
1. Which of the following statements regarding the concept of audit is not true?
a. The most common type of audit is the financial statement audit.
b. The financial statement audit provides an objective opinion on an
organisation’s financial statements.
*c. Financial statement audit provides absolutely guarantee that the financial
reports are free of misstatement.
d. Auditing is a systematic process of objectively obtaining and evaluating
evidence regarding assertions about economic actions and events to ascertain
the degree of correspondence between those assertions and established criteria
and communicating those results to interested users.
Correct answer: c
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
2. The purpose of the financial statement audit is for users to be able to ascertain the
__________ and __________ of the financial statements of an organisation.
*a. credibility; reliability
b. trustworthiness; accuracy
c. correctness; objectivity
d. None of the options is correct.
Correct answer: a
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
3. The objective of financial audit is to:
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.
Correct answer: b
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
, Chapter 13: Auditing and governance of accounting information systems
4. Standards Australia has a risk management standard:
a. ASA 610.
b. ISO 9000.
*c. AS/NZS ISO 31000:2009.
d. none of the options are correct.
Correct answer: c
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
5. Which of the following is not a responsibility of the Board, Audit Committee and
Management?
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.
Correct answer: d
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
6. Which of the following is not a responsibility associated with audit assurance?
a. Compare and analyse risk tolerance and mitigation strategies.
b. Evaluate existing and new controls, costs and effectiveness of monitoring
procedures.
*c. Define objectives, scope and priorities.
d. Assess exposure, report position and recommend insurance (if necessary).
Correct answer: c
Learning objective 13.1 – appraise the importance of the audit function to good corporate
governance.
13.1
, 7. Which of the following statements regarding internal auditing is not true?
a. Internal auditing can improve an organisation’s operations by providing
guidance for management decisions.
b. Internal auditing can improve an organisation’s operations by providing
guidance for more efficient business operations.
*c. Internal auditing is a subjective assurance and consulting activity designed to
add value and improve an organisation’s operations.
d. Internal auditing is undertaken by professionals who evaluate and improve an
organisation’s risk management, control and governance processes to add
value to the organisation.
Correct answer: c
Learning objective 13.2 – summarise the role of internal audit.
8. Which of the following statements regarding the internal audit function is not true?
*a. The internal audit function is not all encompassing.
b. The internal audit function includes the evaluation of controls in business
processes.
c. The internal audit function includes the evaluation of controls in information
systems and systems development projects.
d. The internal audit function includes the evaluation of controls in systems
development projects.
Correct answer: a
Learning objective 13.2 – summarise the role of internal audit.
9. The relationship between internal auditing function and the organisation’s external
auditors can be described as:
a. competing.
b. substitutive.
c. enhancing.
*d. close.
Correct answer: d
Learning objective 13.2 – summarise the role of internal audit.
13.2
