A considerable portion of the tests of controls and substantive tests of transactions are performed simultaneously as a matter of audit convenience. But the substantive tests of transactions procedures and sample size, in part, depend on the results of the tests controls. How can the auditors resolve this apparent inconsistency?

Q: If an analytical procedure confirms audit findings from other procedures, it provides persuasive…

A: Solution concept                 analytical procedure means the procedure of comparing the…

Q: Explain what lapping means, and discuss the internal control deficiency that allows it discuss the…

A: Lapping: It is a type of cash embezzlement or fraud perpetrated by a firm employee. When cash is…

Q: Matters that could affect the necessary extent of testing for a control activity as it related tothe…

A: Auditor: An auditor is a person who is accountable for preparing and examining financial records.…

Q: Substantive analytical procedures are performed by auditor: To identify and assess detection risk To…

A: Auditor is the person who is responsible for performing audit work. Audit means checking and…

Q: List three situations where the auditor would be unlikely to use audit sampling techniques.

A: Audit sampling techniques are the techniques used by the auditor while auditing the entity where the…

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 of the following terms best describes the risk that audit procedures will fail to detect…

A: The Correct Option is C

Q: After considering the client's internal control the auditors have concluded that it is well designed…

A: WHEN AUDITOR FINDS INTERNAL CONTROL TO BE EFFECTIVE , HE REDUCES THE SUBSTANTIVE PROCEDURE . IT…

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: Discuss audit sampling for tests of details of balances and for tests of controls and substantive…

A: Audit sampling is the procedure applied to less than hundred percentage of the transactions under…

Q: EXPLAIN.Which of the following is not done by an auditor when obtaining an understanding of an…

A: Internal controls are the mechanisms and standards that businesses use to protect their sensitive…

Q: An auditor has completed the risk assessment process for the firm and is evaluating the results. If…

A:

Q: Which of the following is not a benefit claimed for the practice of determining materiality inthe…

A: The audit is an independent review of an entity's business records. The objective of audit is the…

Q: explain .After documenting internal control in an audit engagement, the auditor may perform tests on…

A: The following tests that the auditor might perform are presented in the order of the evidence that…

Q: Matters that could affect the necessary extent of testing for a control activity as it related to…

A: Auditor: An auditor is a person who is accountable for preparing and examining financial records.…

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: In an environment that is highly automated, an auditor determines that it is not possible toreduce…

A:

Q: An organization has a mature control environment but limited audit resources. Given this scenario,…

A: Audit:   It is an examination of the financial statements of the company. It helps in determining…

Q: Which of the following describes the circumstances that exist when an auditor assesses control risk…

A: Solution Concept Control risk means the risk that the internal controls that are required to prevent…

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: uld consider whether A. the evidential matter obtained from the study of the internal control…

A: Internal control refers to the systematic approach of formulating policies, programs, rules in order…

Q: What are the objectives of audit risk assessment, and why is it important in assessing the…

A: Given: The objectives of audit risk assessments and the importance of its assessment.

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: Describe to what extent statistical sampling enhances the quality of the audit evidence.

A: Audit evidence is the evidence collected by an auditor during an audit which will form part of his…

Q: In obtaining audit evidence, the auditor should use professional judgment to assess the risk of…

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

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

A: Answer: Option D. Decrease in the assessed control risk.

Q: Which of the following is not one of the tasks undertaken during the phase use of t of the audit? A)…

A: Auditing is an examination of financial data of any entity with a view to express an opinion thereon…

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 inherent risk is high and a reasonable level of assurance has been gained from control testing,…

A: The inherent audit risk is a risk that exists due to any error or omissions in the financial…

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: 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: During its preparatory conversation concerning fraud risks, what factors should the audit team take…

A: Fraud risk refers to management's purposeful misrepresentation of financial accounts to earn…

Q: Which of the following is not a technique of collecting audit evidence? a. Analytical procedures. b.…

A: Audit Evidence It is the information collected by an auditor in order to make sure  the accuracy and…

Q: In an audit sampling application, an auditora. Performs procedures on all items in a balance and…

A: An Auditor takes sampling data to conclude his results.

Q: Why is the audit team more concerned with controlling the exposure to the risk of overreliancethan…

A: Issuance of an unqualified record of financial statements due to the auditor's inability to correct…

Q: What three types of authorizations are commonly used as internalcontrols for sales? For each…

A: Meaning of Internal Control Internal controls are the activities which an organization implements to…

Q: Please outline the audit process, concentrating on the notion of materiality in the audit plan,…

A: The audit process refers to examining a client's financial records by an auditing company or…