Benefits of planning in the audit of financial statements are: 1. to develop appropriate attention to important areas of the audit. 2. To identify and resolve potential problems on a timely basis. 3. Assisting in the selection of engagement team members with appropriate level of capabilities. a- 2 only b- 1,2, and 3 only c- 1 only d- 2 and 3 only

Benefits of planning in the audit of financial statements are: 1. to develop appropriate attention to important areas of the audit. 2. To identify and resolve potential problems on a timely basis. 3. Assisting in the selection of engagement team members with appropriate level of capabilities. a- 2 only b- 1,2, and 3 only c- 1 only d- 2 and 3 only

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

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

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

Chapter6: Audit Evidence

Section: Chapter Questions

Problem 1RQSC

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Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.
S1: The extent of planning will vary according to the size of the entity, the complexity of the audit, the type of opinion to be expressed and the auditor's assessment of the client's ability to pay the audit fee. S2: The auditor's understanding of the entity and its environment assists in the identification of events, transactions and practices which may have a material effect on the financial statements. S3: One of the elements of the audit planning process most likely to be agreed upon with the client before implementation of the audit strategy is the determination of the timing of inventory observation procedures to be performed. A. Only 1 statement is True B. Only 2 statements are True C. All statements are True D. All statementS are False
Which of the following is least likely to be included in the auditor’s engagement letter?(1) Details about the preliminary audit strategy.(2) Overview of the objectives of the engagement.(3) Statement that management is responsible for the financial statements.(4) Description of the level of assurance obtained when conducting the audit.
s1: The component auditor is responsible for the direction, supervision and performance of the group audit engagement in compliance with professional standards and regulatory and legal requirements, and whether the auditor's report that is issued is appropriate in the circumstances. S2: The auditor's report on the group financial statements shall may refer to a component auditor. S3: A group have have one or more components. a. All statements are true b. All statements are false c. S1 and S2 are true d. S2 and S3 is true
Compliance auditing often extends beyond audits leading to the expression of opinions on the fairness of financial presentation and includes audits of efficiency, economy, effectiveness, as well as: Select one: a. accuracy. b. evaluation. c. adherence to specific rules or procedures d. internal control.
Compliance auditing often extends beyond audits leading to the expression ofopinions on the fairness of financial presentation and includes audits of efficiency,economy, effectiveness, as well as(1) accuracy.(2) adherence to specific rules or procedures.(3) evaluation.(4) internal control
The Responsibilities principle underlying AICPA auditing standards includes arequirement that(1) field work be adequately planned and supervised.(2) the auditor’s report state whether or not the financial statements conform togenerally accepted accounting principles.(3) professional judgment be exercised by the auditor.(4) informative disclosures in the financial statements be reasonably adequate.
The primary objective of compliance auditing is toa. Give an opinion on financial statements.b. Develop a basis for a report on internal control.c. Perform a study of effective and efficient use of resources.d. Determine whether client personnel are following laws, rules, regulations, and policies
Communicating Key Audit Matters in the audit report is : A. Additional communication to provide transparency in the auditor’s professional judgment, B. An assistance for financial statement users to better understand the entity and areas of significant management juudgments C. A substitute for disclosures in the financial statements that the applicable financial reporting framework requires management to make D. A separate additional opinion on individual matters Seçimimi temizle
5. In this stage of the operations audit process, assess conformity with the program, schedule, and objectives, and then assess the performance of the audit team. * a. Reviewing and improving the audit program b. Monitoring the audit program c. Establishing the audit program d. Implementing the audit program 6. In the management activity of " commitment and tone from the top," which of the following will not be used by an operations auditor to assess whether or not the entity meets the audit objectives? * a. Clear expectations b. Efficiency as a priority c. Established base lines d. Risk assessment 7. These performance measures highlight potential opportunities to convert given resources to the end product with less waste. * a. Economy performance measures b. Efficiency performance measures c. Equity performance measures d. Effectiveness…
Direction: summarize each step of the risk-based audit process. • Establishing audit objective• Agreeing to the terms of engagement• Obtaining knowledge of the business• Development of an overall audit plan
The internal audit risk assessment process: [SELECT ALL THAT APPLY] a) Provides the Internal Audit function with an ability to prioritize risk areas based on objective and subjective evaluation criteria. b) Should be considered the foundation of the audit function. c) Leads to the creation of the annual audit plan and audit budget. d) Should leverage management's enterprise risk management assessment process, if appropriate.