WorksheetsPertemuan 4 Audit ACCA
Total questions: 20
Worksheet time: 31mins
Which TWO of the following statements describe the main advantages of establishing an
audit committee?
The position of the internal audit department will be strengthened within the organisation.
Corporate governance will be enhanced as the board of directors will report to the audit
committee.
The effectiveness of the internal audit department will be improved as the audit committee
will monitor and review its performance on a regular basis.
The workload of the internal audit department will be better managed as the audit
committee will be able to minimise the extent to which the external auditors rely on the
work of the internal auditors.
Once established, the audit committee will have many objectives.
Which of the following does NOT form part of the audit committee's objectives?
Safeguarding the privacy of whistleblowers
Appointing the external auditor
Monitoring the independence of the external auditor
Implementing a policy on the supply of non-audit services by the external auditor
Which of the following statements best describes why having an audit committee could
help Conoy raise additional finance by addressing the concerns of the bank?
The independent non-executive members of the audit committee can provide guarantees
to the bank concerning Conoy's financial viability.
The audit committee will have at least one member who has relevant financial experience.
This person will be able to stand in as Conoy's finance director before a new finance
director is appointed.
The audit committee will have at least one member who has relevant financial experience,
so that they can monitor the integrity of the financial statements.
The audit committee will review all the available evidence to substantiate information in
financial reporting, thus improving the credibility of the financial statements.
Which of the following features are corporate governance weaknesses which Tangerine Co
would need to address prior to their listing?
(1) The chairman has sole responsibility for liaising with shareholders.
(2) The company has not established an internal audit function.
(3) The chairman and one of the NEDs are former executive directors of Tangerine Co.
1 and 2 only
1 and 3 only
2 and 3 only
1, 2 and 3
All the directors have been members of the board for at least four years.
The directors should be subject to annual
re-election
The directors must be reappointed
annually by the chairman
The board is comprised of six executive and four non-executive directors.
At least 50% of the board, excluding the
Chair, must be comprised of nonexecutive
directors whom the board
considers to be independent
At least 75% of the board must be
comprised of executive directors
The audit engagement partner has assessed the make-up of the audit committee.
Which of the following would be valid conclusions from this assessment?
(1) It is acceptable for the chairman to chair the audit committee.
(2) A new member of the audit committee with relevant financial experience must be
recruited.
1 Only
2 Only
1 and 2
Neither 1 nor 2
The audit committee should be made up of independent nonexecutive directors
True
False
The audit committee normally appoints the external auditors at the
AGM
True
False
The audit committee monitors and reviews the internal audit
function
True
False
The audit committee sets out the scope of the external auditor's
work
True
False
The audit committee's terms of reference should
include reviewing and monitoring the external auditor's
independence and objectivity
True
False
The audit committee's terms of reference should
include appointing and removing the external auditors
True
False
The audit committee's terms of reference should
include evaluating and monitoring the effectiveness of
the internal audit function
True
False
Which of the following are typical requirements contained within best practice corporate
governance guidelines?
(1) The remuneration committee should only consist of independent non-executive
directors
(2) The chief executive officer should be responsible for leadership of the board and
ensuring its effectiveness
(3) The non-executive directors should provide constructive challenge and strategic
guidance
(4) The audit committee’s key role is appointing and liaising with the external auditor
1 and 3 Only
2 and 4 Only
1,3, and 4
2,3, and 4
Which of the following is NOT a matter the audit team should consider in determining
whether or not the internal auditor's work is adequate for the purposes of the audit?
Whether the work was properly planned, performed, supervised, reviewed and
documented
Whether there are any significant threats to the objectivity of the internal auditor
Whether sufficient appropriate evidence was obtained to allow the internal auditors
to draw reasonable conclusions
Whether the conclusions reached are appropriate in the circumstances and the
reports prepared are consistent with the results of the work done
Which of the following considerations is the MOST important when deciding whether or not
to rely on the work performed by Carlise's internal audit department?
Whether any members of Carlise's internal audit department hold a professional
qualification
Whether the work performed by the internal audit department relates to specific
audit assertions over which UYE & Co has concerns
Whether a separate audit committee exists
Whether Carlise's internal audit department has a work plan which schedules the
work they should perform to the end of the year
Which of the following assignments could the internal audit department be asked to
perform by management?
Undertake 'mystery shopper' reviews, where they enter the store as a customer,
purchase goods and rate the overall shopping experience
Assist the external auditors by requesting bank confirmation letters
Provide advice on the implementation of a new payroll package for the payroll
department
Review the company's financial statements on behalf of the board
With which of the following activities should the internal audit function NOT be involved?
Monitoring of management's performance
Reviewing adequacy of management information for decision-making purposes
Taking responsibility for the implementation of a new sales ledger system
Assessing compliance with regulation relevant to SGCC
The board has started to compile a list of tasks for the IA department to carry out once it is
up and running. It has been agreed that the first assignment to be completed will be for IA to
review Sistar Co’s processes over capital expenditure to verify if the right items are purchased
at an appropriate time and competitive price.
What type of internal audit assignment does this represent?
A value for money audit
A management audit
a financial audit
an IT Audit
