principles of auditing
chapter 2
Homework Answers
QUESTION 11
The answer is False because Audit risk for an individual account consist of inherent risk, detection risk and control risk
QUESTION 12
There is an inverse relationship between effectiveness of an entity's system of an internal control and the Reliability of financial statement
So answer is option(1)
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principles of auditing
chapter 2
QUESTION 11 Audit risk for an individual account consists of business...
principles of auditing chapter 2 QUESTION 7 The internal controls of an entity are the policies...
principles of auditing
chapter 2
QUESTION 7 The internal controls of an entity are the policies and procedures, which the entity has implemented to provide reasonable assurance that the entity's objectives are being achieved. True False QUESTION 8 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Content of the auditor's report, study of internal control, and planning. B. Competence, independence, and professional care of individuals performing the audit. C. Content...
principles of auditing chapter 2 QUESTION 13 The three generally accepted auditing standards classified as general...
principles of auditing
chapter 2
QUESTION 13 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Competence, independence, and professional care of individuals performing the audit. B. Planning and supervision of the audit engagement C. Content of the financial statements and related footnote disclosures and the consistency standard. D. Content of the auditor's report, study of internal control, and planning. QUESTION 14 The internal controls of an entity are the policies...
principles of auditing ch 2 QUESTION 15 The sufficiency of audit evidence refers to the validity...
principles of auditing
ch 2
QUESTION 15 The sufficiency of audit evidence refers to the validity and relevance of the evidence. O True False QUESTION 16 The acceptable level of detection risk is A. Inherent risk times control risk. B. Inversely related to the amount of evidence to be gathered. C. The level of confidence, which is planned to be achieved. D. The inverse of audit risk.
principles of auditing chapter 2 QUESTION 9 In a financial statement audit, inherent risk represents A....
principles of auditing
chapter 2
QUESTION 9 In a financial statement audit, inherent risk represents A. The risk that the auditor fails to modify materially misstated financial statements. B. The risk that misstatements could occur and not be prevented or detected by the system of internal control. C. The susceptibility of an account balance to misstatement that could be material. D. The risk that misstatements could occur and not be detected by the auditor's procedures. QUESTION 10 An auditor strives...
Principles of auditing chapter 2 QUESTION 17 Match the term with the correct definition Classified into...
Principles of auditing
chapter 2
QUESTION 17 Match the term with the correct definition Classified into general standards, standards of fieldwork, and standards of reporting. One minus detection risk. The underlying accounting data and all related corroborating information available to an auditor. A. Audit Evidence The likelihood that misstatement could occur and not B. Attestation Risk be prevented or detected by internal controls. C. Level of Confidence The probability that an attestor may unknowingly fail to D. Control Risk modify...
Principles of auditing chapter 2 QUESTION 5 The generally accepted standards of fieldwork relate to A....
Principles of auditing
chapter 2
QUESTION 5 The generally accepted standards of fieldwork relate to A. Criteria for the content of the auditor's report on financial statements. B. Audit planning and evidence gathering. C. The need to maintain independence in mental attitude. D. The competence, independence, and professional care of persons performing the audit. QUESTION 6 The preliminary estimate of materiality bears an inverse relationship to audit risk. True False QUESTION 7
6. Which of the following statements is not correct? If (a) (b) (c) individual audit risk...
6. Which of the following statements is not correct? If (a) (b) (c) individual audit risk remains the same, detection risk has an inverse relationship to inherent risk and control risk. The auditor may make separate or combined assessments of inherent risk and control risk. Detection risk cannot be changed at the auditor's discretion The greater the inherent and control risks the auditor believes exist, the less detection risk that can be accepted. (d) 7. Inherent risk and control risk...
Principles of auditing ch 8 Internal Controls QUESTION 10 Which of the following elements is not...
Principles of auditing
ch 8 Internal Controls
QUESTION 10 Which of the following elements is not a part of an entity's internal controls? A. Information and communication systems support. B. Control risk. C. Control activities. D. The control environment. QUESTION 11 Which of the following is the correct order for performing the procedures noted? A. Perform substantive tests, test controls, understand the system of internal control. B. Test controls, understand the system of internal control, perform substantive tests. C. Test...
(TCO H) Audit risk consists of inherent risk, control risk, and detection risk. (a) Please completely define each of the above. (b) Indicate whether each of the statements below is true or false and e...
(TCO H) Audit risk consists of inherent risk, control risk, and detection risk. (a) Please completely define each of the above. (b) Indicate whether each of the statements below is true or false and explain your position. (1) The risk that material misstatement will not be prevented or detected on a timely basis by internal controls can be reduced to 0 by having effective controls in place. (2) Detection risk is a function of the efficiency of an auditing procedure....
auditing Question one Answer each of the following statements true or false. If it's false explain...
auditing
Question one Answer each of the following statements true or false. If it's false explain how the correct statement should be. (10 marks) i) If planned performance materiality is reduced, the amount of evidence the auditor accumulates will decrease. ii) If acceptable audit risk is low, and inherent risk and control risk are both low, then planned detection risk should be high. ii) If the audit assurance rate or tolerable misstatement is 95%, then the level of acceptable audit...
principles of auditing
chapter 2
QUESTION 7 The internal controls of an entity are the policies and procedures, which the entity has implemented to provide reasonable assurance that the entity's objectives are being achieved. True False QUESTION 8 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Content of the auditor's report, study of internal control, and planning. B. Competence, independence, and professional care of individuals performing the audit. C. Content...
principles of auditing
chapter 2
QUESTION 13 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Competence, independence, and professional care of individuals performing the audit. B. Planning and supervision of the audit engagement C. Content of the financial statements and related footnote disclosures and the consistency standard. D. Content of the auditor's report, study of internal control, and planning. QUESTION 14 The internal controls of an entity are the policies...
principles of auditing
ch 2
QUESTION 15 The sufficiency of audit evidence refers to the validity and relevance of the evidence. O True False QUESTION 16 The acceptable level of detection risk is A. Inherent risk times control risk. B. Inversely related to the amount of evidence to be gathered. C. The level of confidence, which is planned to be achieved. D. The inverse of audit risk.
principles of auditing
chapter 2
QUESTION 9 In a financial statement audit, inherent risk represents A. The risk that the auditor fails to modify materially misstated financial statements. B. The risk that misstatements could occur and not be prevented or detected by the system of internal control. C. The susceptibility of an account balance to misstatement that could be material. D. The risk that misstatements could occur and not be detected by the auditor's procedures. QUESTION 10 An auditor strives...
Principles of auditing
chapter 2
QUESTION 17 Match the term with the correct definition Classified into general standards, standards of fieldwork, and standards of reporting. One minus detection risk. The underlying accounting data and all related corroborating information available to an auditor. A. Audit Evidence The likelihood that misstatement could occur and not B. Attestation Risk be prevented or detected by internal controls. C. Level of Confidence The probability that an attestor may unknowingly fail to D. Control Risk modify...
Principles of auditing
chapter 2
QUESTION 5 The generally accepted standards of fieldwork relate to A. Criteria for the content of the auditor's report on financial statements. B. Audit planning and evidence gathering. C. The need to maintain independence in mental attitude. D. The competence, independence, and professional care of persons performing the audit. QUESTION 6 The preliminary estimate of materiality bears an inverse relationship to audit risk. True False QUESTION 7
6. Which of the following statements is not correct? If (a) (b) (c) individual audit risk remains the same, detection risk has an inverse relationship to inherent risk and control risk. The auditor may make separate or combined assessments of inherent risk and control risk. Detection risk cannot be changed at the auditor's discretion The greater the inherent and control risks the auditor believes exist, the less detection risk that can be accepted. (d) 7. Inherent risk and control risk...
Principles of auditing
ch 8 Internal Controls
QUESTION 10 Which of the following elements is not a part of an entity's internal controls? A. Information and communication systems support. B. Control risk. C. Control activities. D. The control environment. QUESTION 11 Which of the following is the correct order for performing the procedures noted? A. Perform substantive tests, test controls, understand the system of internal control. B. Test controls, understand the system of internal control, perform substantive tests. C. Test...
auditing
Question one Answer each of the following statements true or false. If it's false explain how the correct statement should be. (10 marks) i) If planned performance materiality is reduced, the amount of evidence the auditor accumulates will decrease. ii) If acceptable audit risk is low, and inherent risk and control risk are both low, then planned detection risk should be high. ii) If the audit assurance rate or tolerable misstatement is 95%, then the level of acceptable audit...
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