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The auditor deletes some necessary audit procedures. This is an example of Select one: a. Control...
Using the audit risk model, state the effect on control risk, inherent risk, acceptable audit risk,...
Using the audit risk model, state the effect on control risk, inherent risk, acceptable audit risk, and planned evidence for each of the following independent events. In each of the events cirlce one letter for each of the three independent variables and planned evidence: I=increase, D=decrease, N= no effect, and C= cannot determine from the information provided. A. The client's management materially decreased long-term contractual debt: Control risk IDNC Acceptable audit risk IDNC Inherent risk IDNC Planned evidence IDNC B....
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...
Question 13 When control risk is deemed high, the auditor should: (Select the correct answer.) a....
Question 13 When control risk is deemed high, the auditor should: (Select the correct answer.) a. Perform sufficient and appropriate substantive procedures that reduce detection risk to a low level. b. Perform sufficient and appropriate substantive procedures that reduce inherent risk to a low level. c. Perform fewer sufficient and appropriate substantive procedures in order to increase detection risk. d. Resign from the audit engagement. Question 14 An auditor determines that management integrity is high, the RMM is low, and...
The auditor concludes that the clients inherent risk is 40% and control risk is 60%. The...
The auditor concludes that the clients inherent risk is 40% and control risk is 60%. The auditor decides to test controls in order to be able to rely on controls. The auditor plans to conduct year-end substantive audit procedures in order to achieve a detection risk of 30%. What is the probability that that auditor will discover a material misstatement during the year-end substantive audit procedures? Answer = 1.68 [(.6 X .4) X 7] Why?????
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...
Chapter 5 & 6- Basics of the Audit Understand the different types of procedures (analytics, sampling,...
Chapter 5 & 6- Basics of the Audit Understand the different types of procedures (analytics, sampling, year end, interim work)- what they mean, being able to identify examples. (If I give you a procedure can you determine if it is an analytical procedure, work performed at interim, etc.) Understanding the audit risk model- what it means to asses risk as high, moderate, low, or maximum. (Do you do more or less work) (If I change one part of the formula...
1. One of the initial steps in the audit process is to obtain a _______ that...
1. One of the initial steps in the audit process is to obtain a _______ that is used as an agreement between a CPA firm and a client for the conduct of an audit and related services. a)10-Q filed with the SEC b)Assessment report c)Audit and risk report d)Engagement letter 2. An auditor must consider both acceptable audit risk and inherent risk when planning an audit. These two types of risk affect the: a)Amount of evidence that needs to be...
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.
Question 31 In planning an audit, the internal auditor should design audit objectives and procedures to...
Question 31 In planning an audit, the internal auditor should design audit objectives and procedures to address the risk associated with the activity. Risk is defined as Answer saved Marked out of 1.00 P Flag question Select one: a. the failure to adhere to organizational policies, plans, and procedures, or not complying with relevant laws and regulations. O b. the failure to accomplish established objectives and goals for operations or programs. c. the risk that the balance or class of...
When would auditors increase the amount of detailed audit procedures used to test the year-end account...
When would auditors increase the amount of detailed audit procedures used to test the year-end account balances and transactions from throughout the year? a) When the inherent risk in high b) When the inherent risk is low c) When the control risk is low d) When the detection risk is low
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...
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
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.
Question 31 In planning an audit, the internal auditor should design audit objectives and procedures to address the risk associated with the activity. Risk is defined as Answer saved Marked out of 1.00 P Flag question Select one: a. the failure to adhere to organizational policies, plans, and procedures, or not complying with relevant laws and regulations. O b. the failure to accomplish established objectives and goals for operations or programs. c. the risk that the balance or class of...
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