Answer Happy

A: Auditors are not necessarily able to resign their appointment.
B: Loss of reputation and disciplinary actions provide sufficient incentives for auditors to maintain
high standards.
C: Other service providers are able to limit their liability.
D: Limiting the liability of auditors would set a precedent for other professionals.
2. ASA 240 (ISA 240) requires the auditor to plan to conduct the audit in such a way as to:
A: Have a reasonable expectation of detecting all errors and fraud.
B: Detect all errors and fraud.
C: Search for all material errors and fraud.
D: Have a reasonable expectation of detecting all material errors and fraud.
3. When the auditor becomes aware of the existence of fraud, reporting this information to
parties outside the entity is required:
A: When s. 311 of the Corporations Act applies, or in the public interest.
B: When the Directors’ Report fails to disclose the irregularity.
C: In no circumstances, due to confidentiality requirements.
D: In all cases.