the susceptibility of an account balance or class of transactions to misstatements that could be material, individually or when aggregated with misstatements in other balances or classes, assuming that there were no related internal control is called : Select one: a. control risk b. audit risk c. detection risk d. inherent 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: In connection with the audit of financial statements, an independent auditor could be responsible…

A: Option A is the correct answer.

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: The objective of dual-purpose tests is to: A. Test internal controls as well as transactions and…

A:

Q: What is the primary difference between fraud and error infinancial statement reporting?a. The…

A: Financial statements are those statements which are prepared at the end of the period for the review…

Q: An audit opinion of a company’s fi nancial reports is most likely intended to:A . detect fraud.B .…

A: Audit opinion: The opinion present by an auditor of findings of the audit examination is known as…

Q: Examining the implications of expectation gaps in the context of audit and assurance on fraud

A: Auditing means the inspection of financial accounts of the company to determine if the records are…

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: Explain why deficiencies in internal controls might not always result in significant misstatements…

A: Internal controls are the systems, rules, and processes implemented by a company to ensure the…

Q: The risk that a client's financial statements are susceptible to material misstatements is a.…

A: SOLUTION- INHERENT RISK IS THE RISK POSED BY AN ERROR OR OMISSION IN A FINANCIAL STATEMENT DUE TO 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: What are the components of the risk of material misstatement (RMM)? What are the components of the…

A:

Q: What is the primary objective of the fraud brainstorming session?a. Determine audit risk and…

A: Brainstorming Session:   The brainstorming sessions are the ones in which critical audit areas are…

Q: What is the difference between Error and Fraud (as defined in auditing) and how shall the auditor…

A: Definition: Auditor: The auditor is an accounting professional hired by a company to review the…

Q: Auditors of financial statements are designed to obtain reasonable assurance of detecting material…

A: The auditor is required to obtain reasonable assurance that financial statements aa a whole are free…

Q: In auditing accounts receivable, the negative form of confirmations request is used when A. Response…

A: Auditing:   Auditing refers to an independent examination of financial information of any…

Q: Tests of controls are most likely to be omitted when(1) an account balance reflects many…

A: Option C is correct

Q: This is a process of evaluating the effectiveness of a client's internal controls in preventing or…

A: INTERNAL CONTROL IS A MECHANISM WHICH IS IMPLEMENTED TO ENSURE THE INTEGRITY OF FINANCIAL AND…

Q: Inherent risk and control risk differ from detection risk in which of the following ways? A.…

A: Inherent risk is the risk of misstatement of financial statements due to factors other than flaws in…

Q: Fraud and error present risks to an entity. Both internal and external auditors are required to deal…

A: Auditing is a process of examining the internal control system and financial statements of the…

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: When obtaining an understanding of the entity and its environment, including its internal control,…

A: The audit of the financial statement is required to be conducted so as to ensure that the financial…

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: If the _______ is less than the _______, the audit team would conclude that the account balance is…

A: Misstatement: It can be defined as the variations between the actual financial statements being…

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 the auditors’ own testing procedures will lead to the decision that…

A:

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: If the auditor believes that a misstatement is or might be intentional and the effect on the…

A: An auditor’s foremost job is to analyze whether the financial statement of the entity has any…

Q: which of the following regarding errors is correct Select one: a. it is easier for the auditor to…

A: Ans. Errors can be of two types - i. Intentional error ii. Unintentional error Intentional errors…

Q: Which of the following statements is FALSE? A. Irregularities are intentional misrepresentations…

A: A. An accounting irregularity is an entry or statement that does not conform to the normal laws,…

Q: To assess the risks of material misstatement with respect to Owners’ Equity Accounts, please…

A: The main thing for  implementing controls  are to avoid frauds in the organisation. Risk in auditing…

Q: In the framework of audit and assurance, we are investigating the consequences of expectation gaps…

A: Auditing is the examination of a company's financial records to establish if the documents are…

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: Which of the following statements is associated with analytical procedure test? a. It helps to…

A: Analytical procedures involve comparisons of recorded amounts, or ratios developed from recorded…

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: The likelihood that material misstatements may have entered the accounting system and notbeen…

A:

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: What is the auditing definition of error and fraud, and how should the auditor deal with each?

A: This question explains about the auditing definition of error and fraud,  auditor deal

Q: Required For each of the questions above, answer the following: a) State the purpose of the internal…

A: Here asked for multi sub part question we will solve for first three sub part question for you.  If…

Q: Which of the following is NOT a potential expo- sure of the FRS? a. a defective audit trail b.…

A: Accounting Information System: AIS collects, records, stores and processes accounting and other data…

Q: What audit procedures are most likely to be used to verify accountsreceivable written off as…

A: Audit procedure:   Audit procedures are the processes, techniques, and methods that auditors perform…

Q: Why might fraud examiners’ attitudes about control systems and materiality differ from that ofother…

A: Materiality is the planning and performing the audit procedures in which certain misstatements,…

Q: From the list of assertions provided, select the relevant assertionts) to each control objective.…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following statements describes why a properly designed and executedaudit may not detect…

A: Auditing: Auditing is the process by which assertions made by management about financial…

Q: Which of the following is not a principle relating to risk assessment?

A: Risk assessment: it is a process or a method to find and analyze the risk factors that could cause…

Q: The risk of not detecting a misstatement resulting from fraud is greater than that resulting from…

A: Audit is the process of verifying books of accounts and financial statements of business and it…