Which of the following is appropriate about risk assessment? A. The assessed level of inherent and control risk can be sufficiently low, thus resulting to eliminating the need for substantive tests. B. Audit risk may be more effectively determined by assessing inherent and control risk separately. C. Detection risk is eliminated if an auditor were to examine 100 percent off the account balance or class of transactions. D. There is an iverse relationship between detection risk and the combined level of inherent and control risk

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

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Q: Auditors have not been successful in measuring the components ofthe audit risk model. How is it…

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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: Which of the following is not true a. Inherent risk and control risk are assessed by the auditor…

A: The question is multiple choice question  Required  Choose the Correct Option.

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: Ordinarily, risk assessment procedures do not involve the use of audit sampling. However, the…

A: The purpose of audit risk assessment is to gain a better understanding of Organisation and its…

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: 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: The following are concepts discussedin this chapter:1. Preliminary judgment about 7. Estimated total…

A: a. Following items are audit planning decisions that require professional judgment as follows: 1.…

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: 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: 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: 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: 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: 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: a. Increase in the timeliness of direction and more detailed review of work O b. None of the options…

A: The correct answer is option d.)

Q: If the potential client operates in a risky industry, the management lacks integrity, and have a…

A: Inherent risk In simple term inherent risk means that there is chance of omission or errors while…

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

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Q: As the acceptable level of detection risk decreases, an auditor may: A. reduce substantive testing…

A: The requirement is to determine a likely auditor reaction to a decreased acceptable level of…

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: If an audit of any of these companies is performed according to the AICPA auditing standards, and…

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

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

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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: If the auditor plans to assess control risk at less than the maximum and rely on controls, and the…

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Q: What are the objectives of audit risk assessment, and why is it important in assessing the…

A: Given: The objectives of audit risk assessments and the importance of its assessment.

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: 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: Some audit procedures may be performed before the end of the reporting period. The more the auditor…

A: Auditing is done in order to know and get the report from the auditors that the financial statements…

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: 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: 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 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: 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: 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: A. The risk the planned further audit procedures will not be able to detect misstatement should be…

A: Audit planning refers to the process of creating a strategy and the desired approach suitable needs…

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: Based on evidence gathered and evaluated, an auditor decides to increase the assessedlevel of…

A: Definition: Planned detection risk is the risk in audit evidence for a segment that will fail to…

Q: The tolerable rate of deviation set by the auditor for tests of controls depends primarily on which…

A: The auditor should determine the maximum rate of deviations from the prescribed control that he…

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: 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…