How are the sufficiency and appropriateness of evidence related to detection risk?

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: What determines the acceptable level of Detection Risk?

A: Detection Risk:   It is a chance that an auditor will fail to identify any material misstatement…

Q: Explain the difference between unique risk and systematic risk

A: Answer

Q: How do you figure out the balance of control and substantive testing? How does this link into…

A: Substantive testing can be defined as the process of auditing financial statements and obtaining…

Q: Why is it important to complement intuition with systematic study?

A: Organizational behaviour is the study of understanding how people behave within groups. The…

Q: If performance materiality increases, what impact would it have on the amount of evidence required…

A: Auditing is an important activity undertaken by almost every organization. It helps increase the…

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

A:

Q: Why would an auditor use observation to gather evidence? What are the strengths and weaknesses of…

A: solution : Why would an auditor use observation to gather evidence? What are the strengths and…

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: What is Non-Sampling Risk?

A: Sampling: It is a procedure used by the auditor to analyze the predetermined number of observations…

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: 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: What is the risk of assessing Control Risk too low?

A: Definition:   Tests of controls: Tests of controls form the part of audit procedures to be…

Q: How is sampling risk controlled?

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

Q: What are the characteristics of Substantive Tests?

A: Audit Planning: Audit planning is the first step in the auditing process. Auditor gathers all the…

Q: What is lapping? What procedures can auditors employ to detect lapping?

A: Lapping: It refers to a type of accounting fraud that involves the hiding of misappropriated or…

Q: Define control risk and detection risk. What is the difference between control risk and detection…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: Whare are the disadvantages of external goverment audits?

A: Government Audits generally refer to audit of performance of the Government activities with respect…

Q: What is the connection between audit sampling and audit data mining?

A: Audit sampling is the method in which audit procedure are performed on less than 100% data. In…

Q: How does Sampling Risk compare to Non-Sampling Risk?

A: Risk:   It is a probability of the financial statements being materially incorrect even though the…

Q: what are the advantages of using Analytical Procedures as Substantive Tests

A: solution concept Analytical Procedures as Substantive Tests               Analytical procedure means…

Q: Audit tests and fraud?

A: For any company auditor is appointed to give an opinion on the financial statements, whether they…

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: What are the risks from subversive threats?

A: Taking illegal access over a firm internal system network by doing activity of surpassing the…

Q: What should occur when a low level of Detection Risk is acceptable?

A: Detection risk is the risk that procedures performed to reduce audit risk will not detect a material…

Q: Discuss about systematic and unsystematic risk.

A: Risk refers to the movement or fluctuation in the value of an investment. The movement can be…

Q: What is the meaning of “statistically significant” in relation to the null hypothesis?

A: Null hyptohesis is the assumption of no effect or no relationship between variables. The Null…

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: The combination of inherent risk and control risk refers to: Detection risk Audit risk Risk of…

A: The answer for above question is given below:

Q: What is lapping?  How can it be detected by an auditor and how can it be prevented?

A: Lapping is an accounting fraud where cash stolen or cash misappropriation is concealed by altering…

Q: How is the directional risk of inventories applied in determining the appropriate audit procedures…

A: Answer: During the audit of any balance sheet items, proper audit procedures are to be gathered to…

Q: How does the source of evidence affect its reliability?

A:

Q: Which of the following components of the audit risk model is most closely associated with attributes…

A: Given: The association of sampling attributes with the components of the audit risk model.

Q: What should the audit team consider in its planning discussionabout fraud risks?

A: Fraud risk is the intentional misstatement in the financial statements by the management for the…

Q: What is the relationship between Evidence and Detection Risk?

A: Detection risk is the risk that an auditor will not find a material misstatement in a client's…

Q: What is the risk of assessing Control Risk too high?

A: Control risk refers to the probability of financial statements that were considered wrongly stated…

Q: Has the validity of the CAPM been confirmed through empirical tests?

A: Introduction: The model of capital asset pricing is a formula that determines the relation between…

Q: True or false: The lower the materiality level, the higher the amount of required evidence from…

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

Q: Non-sampling risk, and more specifically the risk of assessing control risk too low (risk of…

A: Non-sampling risk is the risk that auditors make an incorrect conclusion for any reason that is not…