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UNSW Business School School of Accounting ACCT1501 Accounting and Financial Management 1A Term 1 2021

TUTORIAL WEEK 8 Solutions to Socrative Questions 1. Which of the following is NOT true? The external auditor’s report provides the auditor’s opinion that: the financial statements give a true and fair view. the financial statements are in accordance with the provisions of the Corporations Act 2001. the financial statements are in accordance with applicable accounting standards. the financial statements are accurate. 

2. The external auditor renders an ‘except for’ opinion when he/she: is unable to express an opinion either way because of a limitation in the work he or she was able to do.

considers that the financial statements are not presented fairly in accordance with GAAP. is generally satisfied other than a specified departure from GAAP in the statements.  is unable to obtain sufficient reliable audit evidence.

3. Use of the same accounting methods over time facilitates: disclosure. relevance. comparability.  faithful representation.

4. The decision by a motor repair company to expense small tools immediately on acquisition rather than depreciate them over their useful lives is an application of the concept of: timeliness materiality  disclosure understandability

5. The agency charged with the administration and enforcement of the Corporations Act 2001 is the: Australian Securities and Investment Commission (ASIC)  Australian Accounting Standards Board. Australian Auditing Standards Board Australian Accounting Research Foundation.

6. Segregation of duties involves: ensuring that only qualified accountants are employed in the accounting department. separation of record-keeping from handling of assets.  providing each staff member with an individual password. Implementation of controls involves costs.

7. Which of the following is NOT true of a sound system of internal control? Implementation of controls involves costs. A sound system of internal control is the responsibility of management. A sound system of internal control is fundamental to the production of reliable financial reports. All errors and irregularities should be eliminated. 

8. Which of the following is NOT correct? An effective internal control system for any organization is one that: discourages inefficient use of resources. helps management safeguard assets. assists management in controlling the enterprise. prevents collusion between employees. 

9. Which of the following is NOT a significant feature of a system of internal control over cash? More than one person opens mail. The person who does bank reconciliations should not be the cashier. The staff member responsible for approving invoices for payment should sign cheques.  Bank reconciliation statements are prepared at regular intervals....