Determine if the mistake is counterbalancing or noncounterbalancing. Give a specific example for each.

Q: Which of the following would not result in exposure to nonsampling risk?a. Measuring the…

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

Q: Give two examples of errors of principle?

A: Errors of principle refers to errors that are carried out at time of noting down transactions…

Q: Accounting analyse the impact the discovery of control deficiencies will have on the approach to…

A: Sampling is the process of picking a specific number of observations from a larger population in…

Q: explain what is meant by overtrading and identify the syptoms that you would look for to determine…

A: Over-trading is a situation where a company does more business in terms of excessive buying and…

Q: Compare the designs of your choice of two internal controls. Determine which is the preferred design…

A: Preventive control is the most important control out of the other internal controls because it…

Q: MUS's auditor assesses what is an acceptable misstatement

A: Dollar unit sampling (MUS) is a quantitative sampling procedure that is sometimes referred to as…

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

A: A tolerable misstatement states the amount by which a financial statement line item can differ from…

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: Give one example of an error that a check digit control detects.

A:

Q: Why are auditors more concerned with the risk of incorrect acceptance than the risk of incorrect…

A: Definition:

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: Explain errors of principle and give two examples with measures to rectifythem.

A: An error of principle is an accounting mistake in which an entry is recorded in the incorrect…

Q: For both tests of controls and substantive tests of details, non-sampling risk can be reduced by…

A: Solution Concept Sampling risk               Sampling refers to the examination of the sample from…

Q: For each of the following independent scenarios, indicate the effect of the error (if any) on:

A: Step 1 Journal is the part of book keeping.

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: 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: The higher the risk of material misstatements the lower should audit risk be taken. True or false

A: Audit risk is the risk that an auditor expresses an inappropriate opinion.  This is the risk that…

Q: In correction of combined errors, you need to be careful with counterbalancing and non-…

A: Counter Balancing Errors If the effect of an error in one account is cancelled by the effect of one…

Q: Discuss the correction of errors in more detail.

A: Errors in Accounting: Error is a mistake committed in book keeping.

Q: Distinguish between counterbalancing and noncounterbalancing errors. Give an example of each.

A: Difference:Counterbalancing errors are the type of errors that cancels out or equalize other error…

Q: What are the advantages and disadvantages of an adverse audit

A: Adverse audit refers that the opinion has been provided on the financial statements that: The…

Q: Explain why the analysis of differences is important in the confirmation of accounts receivable,…

A: Every business sells goods on credit. The goods sold on credit are known as accounts receivable or…

Q: “Total input includes abnormal as well as normal spoilage and is, therefore, inappropriate as a…

A: Inventory shrinkage: It represents the loss of inventory. In other words, it refers to the…

Q: Understand and apply the four-step process of correcting and reporting errors,regardless of the type…

A: Accounting Error:   It is an unintentional mistake in recording an accounting entry and is…

Q: Which one of the following is the main problem with using non-probability sampling technique? a. The…

A: Sampling is the process of choosing selections from a population.

Q: If detective controls signal error flags, why shouldn’t these types of controls automatically make a…

A:

Q: There is no need to perform substantive tests procedures if the control risk is determined to be…

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

Q: How do the professional audit standards differ for (a) errors, (b) frauds, (c) direct-effect…

A: Errors:   Error refers to omission of amounts or misstatement or disclosure in financial statement.…

Q: Distinguish between counterbalancing and non-counterbalancing errors. Give an example of each.

A: Distinguish between counterbalancing and non-counterbalancing errors. Give an example of each.…

Q: Which of the following is NOT a common type of white box test of controls?a. completeness testsb.…

A: Inference tests is NOT a common type of white box test of controls so the correct option in the…

Q: Name the error which was made under the following circumstances:

A: The error of omission is a type of error that takes the account of results caused due inactions or…

Q: Risk of material misstatements increases if

A: Please see the next step for the solution

Q: If detective controls signal error flags, why shouldn’t this type of controls automatically make a…

A: Definition:   Internal control: Internal control involves the norms and rules which are followed…

Q: Give two examples of errors of commission?

A: Accounting error: Accounting errors can be defined as omission of the fundamental accounting…

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: Counter balancing error is sometimes referred to as: which of the following? a Compensating errors…

A: Rectification entry means where some error has been done in past and we need to rectify that errors.…

Q: Describe the steps to be taken to correct an error.

A: Accounting Error:   It is an unintentional mistake in recording an accounting entry and is…

Q: When searching for the root cause of issues, auditors are effectively searching for the source of…

A: Whenever auditor or management finds out that there are issues in the company. They try to find out…

Q: Which of the following components is not used in determining the upper limit on misstatements?a.…

A: Auditors generally uses Sampling Tools to find any error.