An auditor has completed the risk assessment process for the firm and is evaluating the results. If an auditor has determined that there is a material misstatement which is potentially due to fraud, what are the steps or actions that the auditor should take at this point?

Q: Which of the following statements is correct concerning the understanding of internal control needed…

A: As per relevant standard related to internal control auditor must understand the control environment…

Q: Which of the following would be inappropriate during the risk assessment procedure of the audit…

A: We shall answer the first question, since the exact question wasn't specified.Please resubmit a new…

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: The auditor should seriously consider the profitability of the engagement , when he decides whether…

A: The auditor should seriously consider the profitability of the engagement , when he decides whether…

Q: What is the objectives for Internal Auditors in doing a fraud audit? Briefly explain.

A: Fraud Audit :     Any type of audit assures the risk of material misstatements and ensures the…

Q: Is it necessary for an auditor to get a knowledge of a client's internal controls if the auditor…

A: An auditor is required to express an opinion on the true and fair view of the state of affairs and…

Q: What is the primary objective of the fraud brainstorming session?a. Determine audit risk and…

A: Brainstorming Session:   The brainstorming sessions are the ones in which critical audit areas are…

Q: Distinguish between an auditor’s responsibilities to detect and report errors, illegal acts, and…

A: Definition: Auditor: Auditor is an accounting professional hired by a company to review the…

Q: What is the difference between Error and Fraud (as defined in auditing) and how shall the auditor…

A: Definition: Auditor: The auditor is an accounting professional hired by a company to review the…

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: The auditors have a responsibility to design the audit to provide reasonable assurance of detecting…

A: An audit is a process of checking and verifying the books of account and financial information of…

Q: John Wells, CPA, is planning the audit of CVG Services Inc. As a result of his risk assessment…

A: Events or situations that imply an incentive or motivation to conduct fraud or give a chance to…

Q: The auditor only obtains understanding of internal control related to significant risks identified…

A: Internal control process is related with effective and efficient use of available resources and it…

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: This is a process of evaluating the effectiveness of a client's internal controls in preventing or…

A: INTERNAL CONTROL IS A MECHANISM WHICH IS IMPLEMENTED TO ENSURE THE INTEGRITY OF FINANCIAL AND…

Q: When planning an audit, which of the following is not a factor that affects auditors’ decisions…

A: An auditor is a professional body appointed by firm or enterprise to examine books of accounts and…

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: Risk of incorrect acceptance is defined as _______.     the risk that the auditor concludes that a…

A: Risk of incorrect acceptance may be defined as situation where audit sample supports a conclusion…

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: Why do you think auditors were not able to detect the fraud in their previous audit

A: Auditing:   Auditing refers to an independent examination of financial information of any…

Q: Accounting Which of the following statements is true regarding the identification and assessment of…

A: While undertaking audit for a client, auditor shall try to identify the potential areas of risk to…

Q: List two major characteristics that are useful in predicting the likelihood of fraudulent financial…

A: Audit: An audit is defined as: the independent examination of and expression of opinion on the…

Q: Why do you think that inherent and control risk is responsible for the audited company(client) and…

A: Audit means checking, verifying and examining all the financial records and information to ensure…

Q: If an auditor does not intend to rely on internal controls in the audit, does the auditor need to…

A: Audit is the process of checking and verifying the authenticity of the financial statements of the…

Q: Explain how ratio analysis and industry comparisons can be useful to the auditor identifying…

A: Ratio Analysis is a tool by which an auditor can examine the data for the two financial years and…

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 statements is correct concerning analytical procedures used in planning an…

A: Analytical procedures:   Analytical procedures are the examination of the financial statements. The…

Q: Which of the following is least likely to be considered an appropriate response relating to risks…

A: assessing risks at financial statements level - - evaluation of period-end financial statements…

Q: Auditing standards require that the engagement team members engage in discussion about the…

A: Audit: It is a systematic examination of books of accounts of an individual or a firm. It is done by…

Q: The following questions concern the auditor’s responses to thepossibility of fraud.a. When fraud…

A: Auditor's responses should focus on how the groups will obtain will acquire proof to lessen the…

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: 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: a) The primary responsibility for the prevention and detection of fraud rests with both those…

A: 1) Yes, I completely agree because it is the management and the government entity that are…

Q: The audit risk model includes the four risks listed below. Match the type of risk with the related…

A: Audit risk is the risk that financial statements are material misstatement and audit opinion states…

Q: For each of the above deficiencies, identify the possible impact on the company’s operation and…

A: Internal control is a system of organizing the company in which a set of rules, policies, and…

Q: As an auditor of ABC Co, apply auditing principles and standards examine the expectation gaps in the…

A: Expectation gap in Auditing means if the company and its management has some expectation in the…

Q: What is the auditing definition of error and fraud, and how should the auditor deal with each?

A: This question explains about the auditing definition of error and fraud,  auditor deal

Q: What factors should the audit team take into consideration when discussing fraud threats during the…

A: Auditing involves an independent examination of financial records of the entity with a view to…

Q: Which two of the following characterize the work of fraud examiners?a. Analysis of control…

A: Audit: Audit is the process of verification of the compliance of the financial statements. It…

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 would generally not be used ? Select one : O a. Re -perform client procedures

A: Internal control procedures means control procedures that are used for safeguarding of assets of the…

Q: The fraud triangle consists of situational pressure, opportunity and ethics. Evaluate these three…

A: The fraud triangle is a concept widely used in auditing to describe the reason when an individual…

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…