As the acceptable level of detection risk decreases, an auditor may change the a. Timing of substantive tests by performing them at an interim date rather than at year-end. b. Assessed level of control risk. c. Timing of tests of controls by performing them at several dates rather than at one time. d. Assessed level of inherent risk to a higher amount. e. Nature of substantive procedures from a l

As the acceptable level of detection risk decreases, an auditor may change the a. Timing of substantive tests by performing them at an interim date rather than at year-end. b. Assessed level of control risk. c. Timing of tests of controls by performing them at several dates rather than at one time. d. Assessed level of inherent risk to a higher amount. e. Nature of substantive procedures from a l

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter7: Planning The Audit: Identifying, And Responding To The Risk Of Material Misstatement

Section: Chapter Questions

Problem 18MCQ

See similar textbooks

Similar questions

As the acceptable level of detection risk decreases, an auditor may: A. reduce substantive testing by rrelying on the assessment of inherent risk and control risk. B. postpone the planned timing of substantive tests from interim dates to the year-end. C.Eliminate the assessed level of inherent risk from consideration as a planning factor. D. lower the assessed level of control risk
On the basis of audit evidence gathered and evaluated, an auditor decides to decrease the level of detection risk from that originally planned. Assuming the same planned audit risk level, the change in the planned detection risk most likely resulted from a[n) A. Increase in the assessed control risk B.Increase in materiality levels. C. Decrease in the assessed inherent risk D.Decrease in the assessed citrol risk.
In response to an increased level of assessed risk of material misstatement, an auditor of anonissuer would generally A.Not make changes to the nature, timing, or extent of further audit procedures. B.Increase the emphasis on professional skepticism when gathering and evaluating auditevidence with the audit team. C.Perform more substantive audit procedures at an interim date instead of at period end. D.Perform additional tests of controls at an interim date to eliminate the need for substantivetests at period end
The tolerable rate of deviation set by the auditor for tests of controls depends primarily on which of the following? a. The planned risk of assessing control risk too low. b. The dollar amount of substantive misstatements. c. The anticipated cause of the errors. d. The tolerable rate used in audits of other clients in the same industry.
After the audit planning procedures, your audit team decided to place the preliminary audit risk at a high level. Which of the following is correct? A. The risk the planned further audit procedures will not be able to detect misstatement should be increased. B. The auditors should plan set the timing of its extensive substantive testing at year-end. C. The audit materiality levels should be increased. D. The auditors should plan extensive substantive testing through analytical procedures.
1. Which of the following procedures is most appropriately done if the control risk and inherent risk was assessed at a below maximum level where the management does not have effective internal controls in place? * Omit test of controls, then perform substantive testing at year-end Perform tests of controls, then perform substantive testing at year-end Perform tests of controls, then perform substantive testing at an interim period Omit test of controls, then perform substantive testing at an interim period 2. In auditing the financial statements of ESELYU Inc., the management has deliberately precluded you from gathering evidence in one of its cash accounts which you perceive to be material in regards to the audit. Which of the following audit opinion are you most likely to express? * Qualified opinion if the item is material and pervasive Unqualified Opinion if the item is material and…
When an auditor decreases the planned assessed level of control risk because certain control procedures were determined to be more effective than anticipated, the auditor would most likely increase the: a. Extent of tests of details. b. Level of inherent risk. c. Extent of tests of controls. d. Level of detection risk.
Some audit procedures may be performed before the end of the reporting period. The more the auditor relies on the operating effectiveness of controls in the assessment of risk, the greater is the extent of the auditor’s tests of controls. Group of answer choices True, True True, False False, True False, False
Supervision and review are essential parts of managing an engagement. When the auditor obtains audit evidence about the operating effectiveness of controls during an interim period, that is enough to support reliance to reduce substantive procedures to be performed at year-end. Group of answer choices True, False True, True False, True False, False
Which of the following is not compatible with a high level of inherent and control risk? detection risk is low. a larger sample should be used. substantive procedures are less effective. year end tests are preferable.