Corporate Governance Quiz

Which of the following is NOT a benefit of an audit?

• Increased credibility of the financial statements

• Deficiencies in controls may be identified during testing

• Fraud may be detected during the audit

• There is a guarantee that the financial statements are correct

The three party relationship in relation to an audit involves which of the following?

• Auditor, directors and management

• Directors, management and shareholders

• Auditor, directors and shareholders

• Auditor, audit committee and directors

Which of the following best defines Corporate governance?

• The importance a company attaches to systems and controls.

• The means by which a company is directed and controlled

• The extent to which a company is audited, both internally and externally

• An appraisal activity as a service to the entity.

Which of the following summarises the requirements of corporate governance regulation in respect of internal audit?

• The audit committee must review the need for an internal audit function on an annual basis.

• The audit committee must establish an internal audit committee as soon as possible.

• There must either be an audit committee or an internal audit function in place but there is no requirement to have both.

• The finance director must review the need for an internal audit function and should make a request to the audit committee if it is decided that an internal audit function would be beneficial.

What level of assurance will be provided by the independent auditor's report?

• Absolute

• Reasonable

• Moderate

• Limited

Which of the following is NOT a right of the auditor during appointment?

• To speak at general meetings of the shareholders about audit matters

• To have access to the company's books and records

• To receive copies of the written resolutions of the company

• To receive notice of and attend board meetings of the directors

Which of the following is not work you would expect to see an internal auditor undertaking?

• Monitoring internal control systems.

• Overseeing work undertaken by the external auditor.

• Reviewing compliance with laws and regulations.

• Reviewing the efficiency and effectiveness of operating activities.

Which of these is NOT a fundamental ethical principle?

• Integrity

• Independence

• Objectivity

• Professional competence and due care.

An audit firm offers the audit staff tickets to the Rugby World Cup final. Which of the following is the most significant threat created?

• Intimidation

• Advocacy

• Self-review

• Self-interest

Which of the following is control risk?

• The risk of misstatement that a misstatement could occur and that could be material, will not be prevented, or detected and corrected on a timely basis by the entity's controls.

• The risk that the procedures performed by the auditor will not detect a misstatement that exists and could be material.

• The susceptibility of an assertion about a class of transaction, account balance or disclosure to misstatement that could be material, before consideration of any related controls

• The risk that the audit opinion is incorrect.