When considering internal control, an auditor must be aware of the concept ofreasonable assurance, which recognizes that the(1) employment of competent personnel provides assurance that management’scontrol objectives will be achieved.(2) establishment and maintenance of internal control is an important responsibilityof management and not of the auditor.(3) cost of internal control should not exceed the benefits expected to be derivedtherefrom.(4) separation of incompatible functions is necessary to ascertain that the internalcontrol is effective

Q: ltimate purpose of assessing control risk is to contribute to the auditor’s evaluation of the: a.…

A: Control Risk: It is also known as internal control risk; this risk arises due to the inefficiency…

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: The Responsibilities principle requires that auditors be responsiblefor having appropriate…

A: Definition: Independent auditor: Independent auditor or external auditor is the accountant who is…

Q: A key criterion in auditing (both internal and external) is independence. In what way (s) can…

A: There are mainly two types of audits in a business that are external audit and internal audit.…

Q: Which one below is not an example of auditors'substantive testing? Select one: a. Controls testing.…

A: Substantive testing is such an audit procedure that is used for examination of financial statement…

Q: effectiveness of audit

A: An audit is performed by auditor to express an independent opinion on financial statements whether…

Q: audit engagement

A: Statement 1 is correct because an audit engagement is opinion based. The auditor conducts the…

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 Performance Principle in AICPA auditing standards requires the auditor to obtain a sufficient…

A: An auditor is a person who checks the financial statements of the company. An auditor checks the…

Q: An auditor’s preliminary control risk assessment is at a high level. Which of the following are…

A: Solution Explanation - The preliminary assessment of control risk is the process of evaluating the…

Q: auditor obtains sufficient understanding of the internal control structure

A: Auditing is done to verify whether the underlying financial statements show true and fair view of…

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: Auditors have two strategies to choose from, the lower-assessed control risk strategy and the…

A: Incorrect (c)Auditors can always choose to use the predominantly substantive strategy regardless of…

Q: A CPA wishes to use representation letter as a substitute for performing other audit procedures.…

A: Following is the answer to the given question

Q: The following questions deal with assessing controlrisk in a financial statement audit. Choose the…

A: Internal controls can be defined as the procedures to be followed in order to ensure the accounting…

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: 1. Why is audit firm culture important in ensuring that individual audit engagement partners resolve…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: Which of the following statements is incorrect regarding the reliability of audit evidence? a.…

A: The audit is an independent examination of financial information of an entity whether…

Q: In most audits of large entities, control risk assessment contributes to audit efficiency,…

A:

Q: Risk assessment procedures include

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

Q: If an auditor does not intend to rely on internal controls in the audit, does the auditor need to…

A: Audit is the process of checking and verifying the authenticity of the financial statements of the…

Q: What is  the relationship between the external auditor and the organization. What steps have been…

A: An external auditor is the person or firm who verify the financial statements of the organization…

Q: explain each choices. Reportable conditions are matters that come to an auditor's attention and that…

A: Internal  Control: An entity's board of directors, management, and other people are the ones who…

Q: In making a decision whether to accept or reject an engagement, an auditor should consider…

A: Before getting engaged in audit, the auditor must ensure that certain vital parameters are fulfilled…

Q: Auditors are always required to gain a minimum understanding of internal controls, whether or not…

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

Q: Which of the following statements relating to internal and external audits is false?* The execution…

A: Audit is the process of checking and verifying the authenticity of books of account in the business.…

Q: Which of the following aspects of an audit examination is not related to the performance principle?…

A: The audit is a process wherein the books of accounts are examined and checked so as to check their…

Q: Which statement is incorrect regarding the external auditor's consideration of the work of internal…

A: Following is the answer to the given question

Q: From a conceptual standpoint, how do the requirements of Sarbanes–Oxley related to nonaudit services…

A: Sarbanes-Oxley Act: Sarbanes-Oxley Act was formed after the major accounting scandals to provide…

Q: internal audit function acts as a higher level of control to determine that the internal control…

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

Q: Which of the following is least likely to be considered an appropriate response relating to risks…

A: assessing risks at financial statements level - - evaluation of period-end financial statements…

Q: Which of the following best describes the relationship between auditing and…

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

Q: The following factors may affect the group engagement team’s involvement in the work of a component…

A: The component auditor represents the auditors who would perform the audit function on a financial…

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: At Crazy Eddie, the management team established “deceiving the auditors” as a primary strategic…

A:

Q: d. When documenting their understanding of a client's internal controls, auditors are required to…

A: The books of accounts are required to be audited by the auditor so as to check whether the…

Q: A CPA firm’s quality control procedures pertaining to the acceptance of a prospective audit client…

A: CPA is the Certified public accountant which is generally appointed in order to perform audit…

Q: he auditor shall plan the audit so that in can be performed effectively. The auditor shall study…

A: solution: The auditor shall plan the audit so that in can be performed effectively. True Explanation…

Q: For each of the above deficiencies, identify the possible impact on the company’s operation and…

A: Internal control is a system of organizing the company in which a set of rules, policies, and…

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: Critical audit matters are most likely to include those matters that: Multiple Choice Are…

A: A CRITICAL AUDIT MATTER IS ANY MATTER THAT IS COMMUNICATED OR REQUIRED TO BE COMMUNICATED TO THE…

Q: Under what circumstances are external auditors likely to beinvolved in operational auditing? Give…

A: Operational Audit: An operational audit refers to the review of any aspect of the operating…

Q: Select which option is correct. Select one or more: A. The level of professional skepticism can be…

A: Professional skepticism is an attitude that includes a questioning mind, being alert to conditions…

Q: Obtaining an understanding of the internal control structure is required for first time audit…

A: Internal control is an efficient system of control is established by the management in the conduct…

Q: Which of the following statements about management assertions, audit objectives, and audit evidence…

A: The overall objective of an auditor express an opinion on financial statements that it represents…

Q: A related party transaction is a transfer of resources, services, or obligations between related…

A: As per IAS 24  a related party transaction is a transfer of resources, services, or obligations…

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

A: Analytical procedures are the least expensive audit procedures to perform. Test of controls are…

Q: (1) indicate whether you believe the scenario reflects negatively on management integrity, and…

A: Management Integrity is the inbuilt quality of the managers to follow the code of ethics defined for…