The risk that audit evidence for a segment will fail to detect misstatements exceeding tolerable misstatement is: * Audit risk

Q: When assessing and identifying Control Risk or Risk of Material Misstatement, the auditor may answer…

A: When assessing and identifying Control Risk or Risk of Material Misstatement, the auditor may answer…

Q: The risk of incorrect rejection and the risk of underreliance relate to thea. Effectiveness of the…

A:

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: 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: 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: The susceptibility of an assertion about a class of transaction, account balance or disclosure to a…

A: Audit risk is the possibility that an auditor won't find fraud or errors while reviewing a client's…

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

A: The Correct Option is C

Q: Which of the following statements correctly defines the term reasonable assurance? A. A substantial…

A: The objective of the auditor is to obtain high level or assurance.

Q: the susceptibility of an account balance or class of transactions to misstatements that could be…

A: Internal controls: Internal controls are maintained to decline the possibility of fraud. They ensure…

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: If the auditor performing an integrated audit identifies one or more material weaknesses in a…

A: Material weakness is defined as a deficiency or the combination of deficiencies in the company…

Q: Which of the following statements is NOT accurate as it relates to testing and the audit risk? O…

A: auditor shall test the audit risk and perform the risk assessment procedure in order to determine…

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: audit procedures

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

Q: Examine the information enunciated below carefully and identify the impact of increase in the…

A: The first step in conducting audit is the assessment of audit risk inherent to the business which…

Q: Detection risk is the risk that O a client's system of internal controls will not prevent or detect…

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

Q: ome account balances such as those for pensions and leases are the result of complex calculations.…

A: Answer: The correct answer is (3) inherent risk.

Q: Which of the following is not a benefit claimed for the practice of determining materiality inthe…

A: The audit is an independent review of an entity's business records. The objective of audit is the…

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: In which of the following circumstances would an auditor expect to find that an entity had…

A: Definition: Audit: Audit is the process of verification of the compliance of the financial…

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

A: Audit Risk Audit risk which describes as auditors furnish the inappropriate audit opinion whether…

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: When making a decision about the dollar amount in an account balance based on a sample, the audit…

A:

Q: The results of analytical procedures may identify previously unrecognized risk of material…

A: Analytical procedures: In obtaining the audit evidence, the auditor has to finally undergo…

Q: The risk that the auditors’ own testing procedures will lead to the decision that…

A:

Q: What are the risks if the auditor concludes controls are operating effectively based on the sample…

A: Definition:   Sampling risk: Sampling risk is a risk that arises when the judgments based on the…

Q: true when the auditor determines the client has a low risk of material

A: First option is wrong because risk of material misstatements is judged not only based on the…

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: aterial misstatement exists when it does not exist     the risk that an auditor incorrectly…

A: Risk of incorrect rejection is defined as   the risk that the auditor concludes that a…

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: Tolerable error, is the maximum monetary error that the auditor is prepared to accept in the…

A: Materiality is an concept in audit where it plays an key role during the audit process in…

Q: Which of the following does not increase the need for sufficient appropriate auditevidence?(1) A…

A: A lower acceptable level of detection risk, An increase in the assessed control risk, A lower…

Q: Explain how the auditor determines tolerable misstatement for MUS

A: Monetary unit sampling (MUS) is a quantitative sampling process which is often referred to as dollar…

Q: What is risk of incorrect acceptance?     A. The risk that the auditor concludes that a material…

A: The risk of incorrect acceptance is referred to a situation in which the results of an audit sample…

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: 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: Which of the following recognizes that an audit conducted under generally accepted auditing…

A: Reasonable assurance: It is the high level of assurance that material misstatement may not deduct on…

Q: Which of the following is consistent with an assessed level of control risk at below the maximum…

A: solution concept control risk at below the maximum level               The control risk at below the…

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: If the sample evidence does not support the planned level of control risk, the audit team coulda.…

A: Auditing is done in order to determine that the financial statements are not materially misstated.

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…

Q: The auditor is required to document each misstatement identified as "clearly trivial."

A: Trivial misstatement: Trivial misstatement means very small materiality value as 1% to 5% of…