ISA 315 Identifying and assessing the risks of material misstatement requires the auditor to carry out risk assessment procedures to identify the possibility of material misstatement in the financial statements. Required: List three activities that the auditor can perform to help gain an understanding of the entity being audited and so identify the possibility of material misstatements.

ISA 315 Identifying and assessing the risks of material misstatement requires the auditor to carry out risk assessment procedures to identify the possibility of material misstatement in the financial statements. Required: List three activities that the auditor can perform to help gain an understanding of the entity being audited and so identify the possibility of material misstatements.

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

Chapter3: Internal Control Over Financial Reporting: Responsibilities Of Management And The External Auditor

Section: Chapter Questions

Problem 37CYBK

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(a) (i) Explain the concepts of materiality and audit risk and the relationship between them?(ii) ISA 315 Identifying and assessing the risks of material misstatement requires the auditor to carry out risk assessment procedures to identify the possibility of material misstatement in the financial statements. Required:List three activities that the auditor can perform to help gain an understanding of the entity being audited and so identify the possibility of material misstatements.
ISA 315 Identifying and assessing the risks of material misstatement requires the auditor to carry out risk assessment procedures to identify the possibility of material misstatement in the financial statements. Required:1. List three activities that the auditor can perform to help gain an understanding of the entity being audited and so identify the possibility of material misstatements. 2. State audit procedures that auditor may follow to assess fraud
ISA 315 (Revised): Identifying and Assessing The Risks Of Material Misstatement states that the auditor should obtain an understanding of internal control relevant to the audit. Auditors commonly use three types of documents to obtain and document their understanding of the design of internal control: narratives, flowcharts, and internal control questionnaires. REQUIRED: Describe THREE (3) inherent limitations of internal control system that could limit its effectiveness Explain TWO (2) advantages and ONE (1) limitation in using ‘Internal Control Questionnaire’ to document understanding of the internal control system.
ASA570.10 requires the auditor to particularly evaluate the going concern problems and the related risk as part of the audit strategy and processes. What are the implications and the consequences for the audit if it is concluded that the going concern assumption is inappropriate and, as a result, the entity being audited is highly unlikely to continue in business in the foreseeable future? In your response and in your own words, discuss six (6) typical indicators of going concern problems and state the considerations and the additional procedures which should be included as part of the audit program.
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Question 30 If the auditor plans to assess control risk at less than the maximum and rely on internal controls , and the nature, timing, and extent of further audit procedures are based on the lower assessment the auditor must: Obtain evidence that the controls selected for testing are designed effectively and operating effectively during the period under audit. Assess control risk less than the maximum for all relevant assertions. Perform only substantive procedures Provide additional examples of responses to assessed fraud risks relating to fraudulent financial reporting.
In the planning stage of an audit an auditor is required to assess the Risk of Material Misstatement in the financial statements. REQUIRED Identify 5 matters that may indicate a condition or event that may result in an increased Risk of Material Misstatement in the financial statements and for each indictor explain why. Answer in the table below: Condition/Event that may indicate Risk of Material Misstatement in the financial statements Why 1 2 3 4 5
The following are concepts discussedin this chapter:1. Preliminary judgment about 7. Estimated total misstatementmateriality in a segment2. Control risk 8. Planned detection risk3. Risk of fraud 9. Estimate of the combined4. Inherent risk misstatement5. Risk of material misstatements 10. Acceptable audit risk6. Known misstatement 11. Performance materialitya. Identify which items are audit planning decisions requiring professional judgment.b. Identify which items are audit conclusions resulting from application of audit procedures and requiring professional judgment.c. Under what circumstances is it acceptable to change those items in part a. after theaudit is started? Which items can be changed after the audit is 95% completed?
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{Auditing} 50. The auditing standard that is relevant to ISA 250, consideration of Laws and Regulations in an audit of financial statements. Could you identify the opinion/s, which is not the objective of ISA 250? a. To obtain sufficient appropriate audit evidence regarding compliance with the provisions of those laws and regulations b. To perform specified audit procedures to help to identify non-compliance with other laws and regulations c. To respond appropriately to non-compliance or suspected non-compliance identified during the audit d. To ignore non-compliance identified during the audit as it is regular practice of entity
16. The auditors have a responsibility to design the audit to provide reasonable assurance of detecting material errors and fraud and to conduct the audit with due care and professional skepticismSelect one:TrueFalse