Some audit procedures may be performed before the end of the reporting period. The more the auditor relies on the operating effectiveness of controls in the assessment of risk, the greater is the extent of the auditor’s tests of controls. Group of answer choices True, True True, False False, True False, False

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: Which of the following procedures is most appropriately done if the control risk and inherent risk…

A: Audit test control is an audit examination on the internal control of an entity or firm after it…

Q: Matters that could affect the necessary extent of testing for a control activity as it related tothe…

A: Auditor: An auditor is a person who is accountable for preparing and examining financial records.…

Q: The auditor should seriously consider the profitability of the engagement , when he decides whether…

A: The auditor should seriously consider the profitability of the engagement , when he decides whether…

Q: Which of the following tests are considered further audit procedures that may be designed after…

A: Substantive test of details are considered further audit procedures that may be designed after…

Q: Auditors make materiality judgments during the planning/risk assessment phase of the audit to be…

A: Introduction: An auditor verifies the authenticity of commercial transactions that have been…

Q: Which of the following statements is not true with respect to the performance principle?a. Auditors…

A: Answer:   Option a.

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: Which of the following is appropriate about risk assessment? A. The assessed level of inherent and…

A: Risks are the unfavourable situations or circumstances that can make loss for the organisation or…

Q: Ordinarily, risk assessment procedures do not involve the use of audit sampling. However, the…

A: The purpose of audit risk assessment is to gain a better understanding of Organisation and its…

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: Many auditors assert that certain audit tests can be significantlyreduced for clients with adequate…

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

Q: Which of the following terms best describes the risk that audit procedures will fail to detect…

A: The Correct Option is C

Q: After considering the client's internal control the auditors have concluded that it is well designed…

A: WHEN AUDITOR FINDS INTERNAL CONTROL TO BE EFFECTIVE , HE REDUCES THE SUBSTANTIVE PROCEDURE . IT…

Q: If the tests of controls indicate certain controls are not as effective as the auditor originally…

A: Test of controls are performed  to determine the effectiveness of the control to detect and correct…

Q: When the auditor has assessed control risk of a particular area at a reduced level, he or she will…

A: The question is multiple choice question. Required  Choose the Correct Option.

Q: The following are concepts discussedin this chapter:1. Preliminary judgment about 7. Estimated total…

A: a. Following items are audit planning decisions that require professional judgment as follows: 1.…

Q: If the auditor uses the primarily substantive apporach instead of the lower control risk approach…

A: Control risk is one of the risk related to material misstatements in books of accounts in the…

Q: audit procedures

A: The first statement is false, the higher amount of evidence is required if there is higher…

Q: EXPLAIN.Which of the following is not done by an auditor when obtaining an understanding of an…

A: Internal controls are the mechanisms and standards that businesses use to protect their sensitive…

Q: The auditor should assess control risk for each relevant assertion by evaluating the evidence…

A: Relevant assertion: The assertion that shows the possibility of happening a material misstatement is…

Q: Why do auditors typically test internal controls at an interim audit date? O more effective to test…

A: Interim testing is the testing performed by a company typically at some point close to year-end. A…

Q: explain .After documenting internal control in an audit engagement, the auditor may perform tests on…

A: The following tests that the auditor might perform are presented in the order of the evidence that…

Q: Matters that could affect the necessary extent of testing for a control activity as it related to…

A: Auditor: An auditor is a person who is accountable for preparing and examining financial records.…

Q: As the acceptable level of detection risk decreases, an auditor may: A. reduce substantive testing…

A: The requirement is to determine a likely auditor reaction to a decreased acceptable level of…

Q: If an audit of any of these companies is performed according to the AICPA auditing standards, and…

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

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

A:

Q: Generally, which of the following audit procedures is the least expensive to perform?   A.…

A: Answer -  Correct Option is Option A - Analytical procedures.

Q: Speculate on which type of risk creates the most uncertainty for the auditor and recommend at least…

A: An audit occurs when a professional analyses or inspects multiple books of accounts, followed by a…

Q: The auditor’s risk assessment procedures identified severalrisks that the auditor deems to be…

A: Due to the financial misstatement, there is a possibility that an auditor gives an unqualified…

Q: If the auditor plans to assess control risk at less than the maximum and rely on controls, and the…

A:

Q: To allocate the preliminary estimate of materiality to the accounts, the auditor might consider A.…

A: in order to plan the nature timining and extent of the audit procedure that is needed to perform the…

Q: Auditors use different types of audit procedures to gather the evidencenecessary to conclude that…

A: Audit evidence is the evidence the auditor collects from the documents, the information provided…

Q: Grounds for Dismissal. This case is designed like the ones in the chapter. Your assignment is to…

A:

Q: On the basis of audit evidence gathered and evaluated, an auditor decides to decrease the level of…

A: Answer: Option D. Decrease in the assessed control risk.

Q: When an audior increases the assessed level of control risk because certain control activities were…

A: Answer:   Option C.

Q: On the basis of audit evidence gathered and evaluated, an auditor decides to increaseassessed…

A: (1) Increase in inherent risk will lead to an increase in audit risk level as they are directly…

Q: The audit risk model includes the four risks listed below. Match the type of risk with the related…

A: Audit risk is the risk that financial statements are material misstatement and audit opinion states…

Q: An auditor assesses control risk because it: A. is relevant to the auditor's understanding of the…

A: Audit: Audit is the process of verification of the compliance of the financial statements. It…

Q: When Arthus Andersen audited Enron, they should have recognized an acceptable level of detection…

A: Detection risks are the risks that the auditor will fail to find the material misstatement when that…

Q: If inherent risk is high and a reasonable level of assurance has been gained from control testing,…

A: The inherent audit risk is a risk that exists due to any error or omissions in the financial…

Q: Supervision and review are essential parts of managing an engagement. When the auditor obtains…

A: Financial statement assertions also known as the management assertions are defined as an official…

Q: When completing the audit of internal controls for an issuer, the severity of an internal control…

A: Internal control is the managements’ effective and efficient controls for achieving goals and…

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: The tolerable rate of deviation set by the auditor for tests of controls depends primarily on which…

A: The auditor should determine the maximum rate of deviations from the prescribed control that he…

Q: Which of the following would generally not be used ? Select one : O a. Re -perform client procedures

A: Internal control procedures means control procedures that are used for safeguarding of assets of the…

Q: The more the auditor relies on the operating effectiveness of controls in the assessment of risk,…

A: AS per the Auditing Standard "The Auditor's Responses to the Risks of Material Misstatement", Some…

Q: Why is the audit team more concerned with controlling the exposure to the risk of overreliancethan…

A: Issuance of an unqualified record of financial statements due to the auditor's inability to correct…