The risk that the auditors’ own testing procedures will lead to the decision that materialmisstatements do not exist in the financial statements when in fact such misstatements doexist isa. Audit risk.b. Inherent risk.c. Control risk.d. Detection 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: Auditors have not been successful in measuring the components ofthe audit risk model. How is it…

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Q: Define risk of material misstatement. At what level of the financial statements do auditors measure…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

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: During financial statement audit, auditors seek to restrict which type of risk?   Control risk,…

A: Discovery hazard is the opportunity that an inspector will neglect to discover material misquotes…

Q: Which of the following does NOT accurately describe detection risk? assessed as low when control…

A: The risk that the financial statements of an entity include material misstatements is referred to as…

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: Audit standards distinguish auditors’ responsibility for planning procedures for detecting…

A: Auditors have duty to distinguishing material error of budget summaries because of resistance with…

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: 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 statements best describes auditors’ responsibility for detecting a client’s…

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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: Which among the following is not a major purpose of onsite fieldwork conducted by the auditor as a…

A: The fieldwork consists of examining the risks involved in processes, evaluation of internal controls…

Q: The risk that material errors will not be detected is directly controllable by the auditor through…

A: Auditor: An auditor is a person or a group of people who is responsible for conducting an audit of…

Q: The audit report provides reasonable assurance that thefinancial statements are free from material…

A: Introduction Audit report: The auditor's report expresses the auditor's judgment about the accuracy…

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: Which of the following is least likely to be a factor that might indicate to an auditor that an…

A: special considerations are used by auditors where there is a high risk of material misstatements in…

Q: Which of the following would be inappropriate during the risk assessment procedure of the audit…

A: Through an understanding of the entity and its surroundings, the auditor's role is to detect and…

Q: When control risk is assessed at less than high for all financial statements assertions, an auditor…

A: Control Risk: Control risk is the risk that a misrepresentation due to mistake or fraud that might…

Q: an auditor finds any misstatements or deviations in planned procedures: a. the auditor should not…

A: When an auditor finds any misstatements or deviations in the financial statements then the auditor…

Q: Risk of incorrect acceptance is defined as _______.     the risk that the auditor concludes that a…

A: Risk of incorrect acceptance may be defined as situation where audit sample supports a conclusion…

Q: The risk of a material misstatement in the financial statements arising due to error or omission as…

A: Error or Omission is an unintentional mistake which leads to risk of material misstatement in the…

Q: When the auditor identifies that a key control absent he/she would most probably: Select one: a.…

A: d.  Issue a qualified or disclaimer of opinion on internal controls over financial reporting.…

Q: The risk that audit evidence for a segment will fail to detect misstatements exceeding tolerable…

A: Audit evidence refers to all sorts of information, or bunch of documents or any sort of data…

Q: In a financial statement audit, inherent risk represents a. The risk that misstatements could occur…

A: In financial and managerial accounting, Inherent risk is that the risk expose by a slip-up or…

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: Risk assessment procedures include

A: The first statement is false because the risk assessment procedures are the audit procedures to…

Q: Which of the following statements is false regardingsubstantiveanalytical procedures?a. Substantive…

A: Audit is the process of checking and authenticating books of accounts and financial statements. It…

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: ment of materiality guides audit planning and testing   materiality is used to guide the validity…

A: To find the incorrect option as,

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: Which sentence below is true about audit risk:  A. Audit risk is the risk that a company may hire…

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

Q: Which of the following does NOT describe substantive procedures? O includes inspection, inquiry, and…

A: The substantive procedure is the procedure used to create evidence to verify the material statements…

Q: Which of the following risk types increase when an auditor performs substantive analytical audit…

A: Analytical Audit Procedures: Analytical procedure is a method by which standard balances are…

Q: The auditor faces a risk that the examination will not detect material misstatements in the…

A: Introduction: An auditor verifies the accuracy of videoed commercial transactions. Auditors must…

Q: From the options given below identify type of risk in case auditor unable to provide appropriate…

A: Correct Answer is Option B = None of the Option Explanation Here asked question related to unable to…

Q: Which one of the following statements is most appropriate to Control risk? Susceptibility of account…

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

Q: In deciding upon the acceptable risk of incorrect acceptance for an account, an auditor considers…

A: Auditing is the procedure of finding the errors and misstatements presented in the financial…

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: inappropriate during the risk assessment procedure of the audit engagement?

A: First option is wrong because the oral inquiries will help the auditor to procure information…

Q: What do auditors consider when determining the extent to which the internal auditors’ work will…

A: Risk of Material Misstatement: Material misstatement risk is the possibility that an organization's…

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: Define the danger of substantial misrepresentation. RMM is measured by auditors at what level of the…

A: Introduction : Because you posed a question with numerous subparts, we will solve the first three…

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: 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: 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: 2. If an auditor finds any misstatements or deviations in planned procedures: a. the auditor should…

A: Misstatement: It implies to a difference in the way an amount has been reported, classified, and…