7)  In an environment that is highly automated an auditor determines that it is not possible to reduce detection risk solely by using substantive test of transactions. Under these circumstances the auditor most likely would:       Perform test of controls to support a lower level of assessed risk.     Increase sample size to reduce sampling risk and detection risk.     Adjust the materiality level and consider the effect on inherent risk     Apply analytical procedures and consider the effect on control risk

Q: Which of the following is not a typical problem found by auditors when cleansing client data for the…

A: Option D

Q: All of the following are possible responses to a pervasive weakness in internal control except:…

A: Internal Control: Internal control is a cycle, affected by an element's governing body, the…

Q: Based on an assessment of audit risk, the auditors are concerned with the following two risks:…

A: Introduction: Audit risk is the possibility that an auditor would overlook faults or commit fraud…

Q: Discuss the differences between a first-party, second-party, and third-party audit.

A: The first-party audit is also known as internal audits. This is performed by internal audit…

Q: Which of the following is appropriate about risk assessment? A. The assessed level of inherent and…

A: Risks are the unfavourable situations or circumstances that can make loss for the organisation or…

Q: Ordinarily, risk assessment procedures do not involve the use of audit sampling. However, the…

A: The purpose of audit risk assessment is to gain a better understanding of Organisation and its…

Q: Many auditors assert that certain audit tests can be significantlyreduced for clients with adequate…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: Which among the following is not a major purpose of onsite fieldwork conducted by the auditor as a…

A: The fieldwork consists of examining the risks involved in processes, evaluation of internal controls…

Q: (A) The requirement is to find the best statement concerning an auditor’s assessment of…

A: Control risk alludes to the probability that a large misrepresentation originating from a caused by…

Q: Audit sampling for tests of controls is generally appropriate when the application of the control…

A: Solution:- Introduction:- Audit sampling may be defined as ‘the application of audit procedures to…

Q: Auditors must be aware of sampling risks because: A The risk of type 2 error due to increased…

A: The Type 2 error is failing to detect a material misstatement in the financial statements. Type 1…

Q: When it comes to control systems and materiality, why could fraud examiners' views vary from those…

A: Misstatements and judgments are taken into account when determining materiality in the design and…

Q: Auditors have two strategies to choose from, the lower-assessed control risk strategy and the…

A: Incorrect (c)Auditors can always choose to use the predominantly substantive strategy regardless of…

Q: The risk that material errors will not be detected is directly controllable by the auditor through…

A: Auditor: An auditor is a person or a group of people who is responsible for conducting an audit of…

Q: Explain

A: In Statistical sampling, there are equal chances of selection of each sampling unit whereas in…

Q: An internal auditor is examining the effectiveness of procedures management established to protect…

A: "Independent examination of financial information of any company, whether profit-oriented or not,…

Q: f auditors and investigators modified their typical procedures and regularly used a few unexpected…

A: An Auditor is an individual or a firm named by an organization to execute a review. An individual…

Q: When using test data, why are audit teams required to prepare only one transaction to test each IT…

A: Audit test data is used to test the existence and effectiveness of controls built into an…

Q: In which of the following circumstances would an auditor expect to find that an entity had…

A: Definition: Audit: Audit is the process of verification of the compliance of the financial…

Q: Which of the following is an advantage of nonstatistical sampling?a. It measures the audit team’s…

A: Non-statistical sampling: It refers to the method of sampling where the selection of the sample is…

Q: Once the auditor detects a control deficiency, which of the following steps must he or shetake…

A: Internal control is the process of achieving objectives in operational efficiency and effectiveness.…

Q: In most audits of large entities, control risk assessment contributes to audit efficiency,…

A:

Q: 1) Which of the following statements is the most accurate?     a. Data analytics can be…

A: Tool for analyzing the data set in a systematical manner. An auditor can use the data analytics tool…

Q: Which sentence below is true about audit risk:  A. Audit risk is the risk that a company may hire…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: It's important to explain what lapping is and how an auditor may find it. When should the auditor…

A: This question explains about what lapping is and how an auditor may find it.

Q: If the auditor plans to assess control risk at less than the maximum and rely on controls, and the…

A:

Q: Which of the following is an incorrect statement?       a. The amount of audit work should vary…

A: The person that analyzes the books of the company is known as the auditor. The auditor checks all…

Q: Which of the following risk types increase when an auditor performs substantive analytical audit…

A: Analytical Audit Procedures: Analytical procedure is a method by which standard balances are…

Q: aterial misstatement exists when it does not exist     the risk that an auditor incorrectly…

A: Risk of incorrect rejection is defined as   the risk that the auditor concludes that a…

Q: A considerable portion of the tests of controls and substantive tests of transactions are performed…

A: Auditing is basically an inspection or checking of books of accounts maintained by the business.…

Q: Which of the following is not an advantage of non-statistical sampling? a) It allows an auditor to…

A: It requires less staff training is not a advantage of non statistical sampling.... In this sampling…

Q: Grounds for Dismissal. This case is designed like the ones in the chapter. Your assignment is to…

A:

Q: When an audior increases the assessed level of control risk because certain control activities were…

A: Answer:   Option C.

Q: When gathering data, an audit team identified both subjective and objective criteria for measuring…

A: Audit risk is the risk that auditor may give inappropriate opinion when financial statements are…

Q: After obtaining an understanding of an entitiy's internal control, an auditor may assess control…

A: Solution: After obtaining an understanding of an entitiy's internal control, an auditor may assess…

Q: On the basis of audit evidence gathered and evaluated, an auditor decides to increaseassessed…

A: (1) Increase in inherent risk will lead to an increase in audit risk level as they are directly…

Q: The audit program is a list of procedures used to gather sufficient and appropriate audit evidence.…

A: Audit program:-   It is detailed plan of auditing work. It specify list of procedures used to gather…

Q: When Arthus Andersen audited Enron, they should have recognized an acceptable level of detection…

A: Detection risks are the risks that the auditor will fail to find the material misstatement when that…

Q: Ordinarily, it would be appropriate to design audit procedures that would be expected to detect…

A:

Q: If the auditor concludes that audit sampling has not provided a reasonable basis for conclusions…

A: Audit sampling is an investigative technique in which a sample of fewer than 100% of the total items…

Q: The tolerable rate of deviation set by the auditor for tests of controls depends primarily on which…

A: The auditor should determine the maximum rate of deviations from the prescribed control that he…

Q: Non-statistical sampling is commonly used in audit practice. Describe each of the four items…

A: Audit sampling is a method of investigation in which a sample of less than 100% of the total items…

Q: What is “tolerable misstatement”? How is this concept applied when auditors perform audit tests on a…

A: Tolerate misstatement is a term used in auditing that refers to the amount by which a financial…

Q: auditor is able to rely on previous audits' assessments

A: In some cases, auditor may have to place reliance on the work done by the previous auditor or other…

Q: Which of the following audit techniques ordinarily would provide an auditor with the least assurance…

A: Test of controls -  Test of controls is the audit procedure that tests the effectiveness of the…

Q: Which of the following statements describes why a properly designed and executedaudit may not detect…

A: Auditing: Auditing is the process by which assertions made by management about financial…

Q: In a non public audit (AICPA), auditors might chose to not test controls if Select an answer and…

A: As part of audit, it is based on the auditors judgement only to select the appropriate level of risk…