Describe the methodology fordesigning tests of details ofbalances using the audit riskmodel.

Q: In terms of an audit, define " substantive strategy " and " reliance strategy ". How do the…

A: Audit strategy refers to a strategy that guides the audit plan. It refers to the combination of…

Q: Explain how decisions about when and how much substantive testing is performed relate to the overall…

A: The substantive testing is a method used by the audit staff to gather evidence about the…

Q: Define risk of material misstatement. At what level of the financial statements do auditors measure…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: The risk of material misstatement is composed of which audit risk components?a. Inherent risk and…

A: Audit risk: It is the probability that in the materially misrepresented financial statements, the…

Q: Identify the two situations in which samplingis used in an audit.

A: Audit Sampling: Audit sampling refers as an audit technique where audit procedures are applied to a…

Q: What is the audit risk model? Explain the elements of the model

A: Ans. Audit risk refers to the risk that an auditor may issue an unqualified report due to auditor's…

Q: Auditors need to identify audit risk in planning an audit engagement. In doing so, the audit risk…

A: Answer (a) – Audit Risk – Audit risk is a risk that the auditor may give inappropriate opinion when…

Q: Which of the following increase control risk?

A: The answer for the multiple choice question and relevant explanation are presented hereunder : What…

Q: Which of the following is part of phase III of the audit process, which is responding to assessment…

A: Answer: C) Asses the risk or material misstatement

Q: What are the components of the risk of material misstatement (RMM)? What are the components of the…

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Q: The documentation of the audit strategy is a record of the planned nature, timing and extent of risk…

A: The answer for the True or false question and relevant explanation are presented hereunder : What is…

Q: Differentiate between tests of controls and substantive testing and the relationship between the two…

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Q: Which of the following statements is correct regarding detection risk and the audit risk model? OA.…

A: Audit risk is a tool for auditor to evaluate various risks may arise while performing an audit.…

Q: Why is the audit team more concerned with the risk of overreliance than with the risk of…

A: Auditing is a gathering of information and evaluation of evidence as to report on the degree of…

Q: ow to select appropriate audit samplin

A: Answer: Audit sampling is the process of auditing of any financials on sample basis. There are…

Q: Using your knowledge of the relationships among acceptable audit risk, inherent risk, control risk,…

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Q: Distinguish between the "risk driven" and "procedures driven" approaches to auditing, evaluating the…

A: Auditing is described as a process in which the audit team or the individual auditor examines the…

Q: What is the tolerable rate of deviation? How does the audit team use it when deciding whether torely…

A: Tolerable rate of deviation: Tolerable rate of deviation is the maximum rate of deviation is used by…

Q: What responses should an auditor take based on different levels of acceptable detection risk (DR)?…

A: There are different ways an auditor responds to fraud risks that are assessed and it depends upon…

Q: Define the audit risk model and explain each term in the model.Also describe which two factors of…

A: As follows, the audit risk model:

Q: state the effect on planned evidence (increase or decrease) of changing each of 'AN INCREASE IN…

A: Audit Risk Audit risk which describes as auditors furnish the inappropriate audit opinion whether…

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

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Q: Define control risk and explain the role of control risk assessment in audit planning.

A: Three types of risks in auditing: Inherent Risk Control Risk Detection Risk Control Risk: It is…

Q: The auditing assesses the reliability and sufficiency of the information through _____________ a.…

A: The auditing assesses the reliability and sufficiency of the information through _____________ .

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: Which of the following is a correct? Select one: a. Planned detection risk and inherent risk have an…

A: The audit risk refers to the risk that can not be detected by the auditor of the financial…

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: Explain the circumstances when the auditor should revise the components of the audit risk model and…

A: The auditor should revise the parts of the audit risk model once the proof collected throughout the…

Q: Tolerable error, is the maximum monetary error that the auditor is prepared to accept in the…

A: Materiality is an concept in audit where it plays an key role during the audit process in…

Q: Which of the following is not a method that auditors use to control their exposure to sampling risk…

A: Sampling:   Sampling allows an individual to obtain the information about the population of…

Q: In assessing control risk, an auditor selects from a variety of techniques, including A. Inquiry and…

A: Introduction: Auditing means a systematic examination of books to verify the authenticity and…

Q: Explain the definition of the audit expectation gap? Then, discuss some approaches to reducing the…

A: SOLUTION- AUDIT EXPECTATION GAP- THE AUDIT EXPECTATION GAP OCCURS WHEN THERE IS A DIFFERENCE BETWEEN…

Q: What are the components of Audit Risk? Use the Audit risk equation and briefly explain the…

A: Audit risk means the risk that the auditor gives an inappropriate audit opinion  when the financial…

Q: The risks of incorrect acceptance in variables sampling and of overreliance in attributessampling…

A: Attributes sampling is a technique used to control the extent of particular attributes that exist…

Q: Explain how judgement is used in statistical and non-statistical sampling in an audit service

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Q: Based on evidence gathered and evaluated, an auditor decides to increase the assessedlevel of…

A: Definition: Planned detection risk is the risk in audit evidence for a segment that will fail to…

Q: When evaluating the results of an MUS application, the audit team should compare the upper limit on…

A: Answer:   Option d

Q: Describe the sources of audit evidence and levels of reliability.

A: Introduction: Audit evidence is data or information gathered by auditors to analyze a company's…

Q: Which of the following major stages of the audit is most closely related to attributes sampling?a.…

A: Audit sampling is selection of items from a population of items for identifying and assessing the…