Which of the following increase control risk?Select which two options are correct.Select one or more:A.Lack of segregation of dutiesB.Reduction in sample size for substantive testsC.Optimistic forecasts presented to analystsD.Reduction in the size of the internal audit group

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Which of the following increase control risk?

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter8: Specialized Audit Tools: Attributes Sampling, Monetary Unit Sampling, And Data Analytics Tools

Section: Chapter Questions

Problem 32CYBK

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Question

Which of the following increase control risk?

Select which two options are correct.

Select one or more:

Lack of segregation of duties

Reduction in sample size for substantive tests

Optimistic forecasts presented to analysts

Reduction in the size of the internal audit group

Leveraging special tenchniques in analyzing historical data to predict future trends. Forecasting covers the methods and types of forecasting and their application to case studies.

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When 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.
When the computed upper exception rate is greater than the tolerable exception rate, it is necessary for the auditor to take specific action. Which of the following courses of action would be most difficult to justify? Reduce the tolerable exception rate so as to accept the sample results. Expand the sample size and perform more tests. Revise the assessed control risk. Write a letter to management which outlines the control deficiencies.
Which of the following is not compatible with a high level of inherent and control risk? detection risk is low. a larger sample should be used. substantive procedures are less effective. year end tests are preferable.
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Which of the following would not result in the audit team’s selecting a larger sample of controlsfor examination?a. A reduction in the risk of overreliance from 10 percent to 5 percent.b. An increase in the tolerable rate of deviation from 3 percent to 6 percent.c. An increase in the expected population deviation rate from 2 percent to 4 percent.d. All of the above would result in a larger sample of controls