The assessment of control risk can be made at any of the following times except:
Q: Which of the following statements is correct concerning the understanding of internal control needed…
A: As per relevant standard related to internal control auditor must understand the control environment…
Q: For each of the following, determine how the effectiveness of the entity's internal control affect…
A: a) As the entity's internal control is more effective. Auditor would assess less level of material…
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: 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: All of the following are possible responses to a pervasive weakness in internal control except:…
A: Internal Control: Internal control is a cycle, affected by an element's governing body, the…
Q: The preliminary assessment of control risk includes all the following procedures except Consider the…
A: Preliminary assessment of control risk is the process of evaluating the likely effectiveness of an…
Q: In the consideration of internal control, the operating effectiveness of controls is tested by:…
A: internal controls - internal controls are the policies and procedures laid down by the management…
Q: Internal Control Audit Standards. Auditors are required to obtain a sufficient understanding of each…
A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: n audit procedure designed to evaluate the operating effectiveness of controls in preventing or…
A:
Q: True or false Tests of controls generally consist of combination of procedures such as inquiry of…
A: Auditing is the procedure in which the auditor checks and examines the financial statements of the…
Q: Why are weaknesses (lack of desired control procedures) not tested for compliance? Describe how…
A: Test for Compliance Procedures are merely tests that are designed to obtain reasonable assurance…
Q: Must the overall understanding of internal control always be followed by assessment and…
A: Definition: Internal control: Internal control is a process which ensures continuous reliability of…
Q: To test the operating effectiveness of a control, an audit team might use a combination ofeach of…
A: Internal control: It can be defined as a system that includes the policies, rules, and procedures…
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: 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: One way of identifying inadequacies in risk control measures is to conduct a safety audit. A health…
A: An audit is a process conducted by an organization in order to check the financial statements of the…
Q: When the computed upper exception rate is greater than the tolerable exception rate, it is necessary…
A: When the CUER (i.e. computed upper exception rate) is greater than the TER (i.e. tolerable exception…
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: (A) The requirement is to find the best statement concerning an auditor’s assessment of…
A: Control risk alludes to the probability that a large misrepresentation originating from a caused by…
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: 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 procedures used to test the effectiveness of controls in support of a reduced assessed control…
A: Auditors generally test operating effectiveness of controls selected for testing by analysing that…
Q: Auditing standards indicate that if the preliminary control risk assessment is low, the auditor then…
A: The selection of control by the auditor is based on assessing whether the entity's controls…
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: After the completion of safety audits, and thereafter follow-up audits, there is a range of…
A: Following is the answer to the given question
Q: performing test of controls,
A: Option a is wrong because the relationship between the assessed level of control risk and…
Q: Once the auditor detects a control deficiency, which of the following steps must he or shetake…
A: Internal control is the process of achieving objectives in operational efficiency and effectiveness.…
Q: An organization has a mature control environment but limited audit resources. Given this scenario,…
A: Audit: It is an examination of the financial statements of the company. It helps in determining…
Q: Which of the following describes the circumstances that exist when an auditor assesses control risk…
A: Solution Concept Control risk means the risk that the internal controls that are required to prevent…
Q: In considering the evidence needed to assess control risk during the period from interim to…
A: Audit Risk Audit risk which describes as the risk which are associated to conduct the audit work in…
Q: uld consider whether A. the evidential matter obtained from the study of the internal control…
A: Internal control refers to the systematic approach of formulating policies, programs, rules in order…
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: When is the timing of substantive procedures most flexible? O detection risk is assessed as low O…
A: Substantive procedure refers to a process performed by the auditor in order to detect the material…
Q: Which of the following statements is correct concerning analytical procedures used in planning an…
A: Analytical procedures: Analytical procedures are the examination of the financial statements. The…
Q: Describe how the nature of evidence used to evaluate the controlenvironment differs from the nature…
A:
Q: Grounds for Dismissal. This case is designed like the ones in the chapter. Your assignment is to…
A:
Q: Once the auditor detects a control deficiency, which of the following steps must be taken FIRST?…
A: Auditor must access the control risk to maximum level of relevant assertions. When the deficiencies…
Q: After obtaining an understanding of an entitiy's internal control, an auditor may assess control…
A: Solution: After obtaining an understanding of an entitiy's internal control, an auditor may assess…
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: Which of the following is NOT documented during the risk assessment phase? O understanding of…
A: solution dear student as per bartleby guideline we are required to solve the first question only .…
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: When testing a control activity’s operating effectiveness, procedures the auditor performs totest…
A: The answer is provided as follows:
The assessment of control risk can be made at any of the following times except:
A. After some tests of controls are performed concurrently with obtaining an understanding.
B. After performing all the necessary substantive tests.
C. After the performance of additional tests of controls designed to further lower the assessment of control risk.
D. Immediately after obtaining an understanding of internal control.
Step by step
Solved in 2 steps
- How does inherent risk relate to internal controls? Why is it important to assess inherent risks of material misstatement prior to evaluating the quality of an organization’s internal controls?Once the auditor detects a control deficiency, which of the following steps must he or shetake first?a. Perform tests of other controls related to the same assertion as the control deemedineffective.b. Evaluate the severity of the deficiency on the auditor’s control risk assessment for thatassertion.c. Modify the planned substantive procedures as a result of the deficiency.d. Test the deficient control, assuming a maximum level of risk.In considering the evidence needed to assess control risk during the period from interim to year-end, all of the following should be considered except the: A. Significance of the assertion being tested. B. Control risk on other assertions. C. Specific internal control policies and procedures tested during the interim period. D. Degree to which the policies and procedures were tested and the test reults.
- When an audior increases the assessed level of control risk because certain control activities were determined to be ineffective, the auditor would most likely increase the: A. extent of tests of control B. level of detection risk C. extent of tests of detail D. Level of inherent riskWhen the auditor has assessed control risk of a particular area at a reduced level, he or she will then Select one: a. eliminate the need to gather evidence in that area. b. test the effectiveness of the controls in that area. c. proceed to expand the sample sizes in that area. d. negotiate with management to determine which controls will be tested in that area.After obtaining an understanding of an entitiy's internal control, an auditor may assess control risk at the maximum level for some assertions because he A. performs tests of controls to restrict detection risk to an acceptable level. B. identifies internal control policies and procedures that are likely to prevent material misstatements. C. believes the internal control policies and procedures are unlikely to be effective. D. determines that the pertinent internal control components are not well documented.
- Auditing standards indicate that if the preliminary control risk assessment is low, the auditor then gains assurance that the controls are operating effectively. What is meant by testing the operating effectiveness of controls? How does an auditor decide which controls to test?After obtaining a sufficient understanding of internal control, the auditor: a. Determines the preliminary assessment of control risk b. Determine the assessed levels of detection risk and inherent risk c. Assess detection risk to determine the acceptable level of inherent risk d. Assess the need to apply GAASWhen an auditor decreases the planned assessed level of control risk because certain control procedures were determined to be more effective than anticipated, the auditor would most likely increase the: a. Extent of tests of details. b. Level of inherent risk. c. Extent of tests of controls. d. Level of detection risk.
- In assessing control risk, an auditor selects from a variety of techniques, including A. Inquiry and recalculation B. Reperformance and observation C. Comparison and confirmation D. Inspection and verificationAfter obtaining an understanding of the client's internal control, the auditor should consider whether A. the evidential matter obtained from the study of the internal control system can provide a reasonable basis for an opinion. B. the projected degree of effectiveness of internal control is justified. C. further testing of internal control procedures is likely to permit further reduction in the assessed level of control risk. D. sufficient knowledge has been obtained about the entity's entire system of internal control.(A) The requirement is to find the best statement concerning an auditor’s assessment of control risk. Answer (A) is correct because assessing control risk may be performed concurrently during an audit with obtaining an understanding of internal control. Answer (B) is incorrect because evidence about the operation of internal control from prior audits is useful in planning and executing the current year’s assessment of control risk. Answer (C) is incorrect because the basis for an auditor’s conclusions about the level of control risk must be documented when at any time control risk is assessed below maximum. Answer (D) is incorrect because a lower level of control risk requires more assurance, not less, that the controls are operating effectively.
