Which of the following is not one of the primary approaches that the auditors may use when evaluating the reasonableness of accounting estimates?  Group of answer choices  Review and test management's process of developing estimates.  Confirm estimates directly with outsiders.  Review subsequent events or transactions that have bearing on the estimate.  Independently develop an estimate of the amount to be compared to management's estimate.

Q: The auditor prepares the financial statements for DecoPaints SAOG while also serving as the auditor…

A: Audit is the review and examination of books of account and financial information of the business in…

Q: preliminary judgement about materiality is the ______________ amount by which the auditor believes…

A: Materiality: Materialiity is the threshold above which missing or incorrect informatiion within the…

Q: Analytical procedures consist of evaluating financial information by studying financial and…

A:

Q: If an auditor believes the chance of financial failure is low and there is a corresponding increase…

A: Audit risks are mainly of three types: Inherent risk which is derived from the characteristics of…

Q: Which of the following best describes the effect of a contingent fee arrangement on the auditor's…

A: The contingent fees rule has been defined in Section 1.510 of the AICPA’s revised Code of…

Q: b. A reply from a receivable confirmation letter received from the customer through the client is…

A: Confirmation letters are part of audit procedure and are sent to outside parties to confirm certain…

Q: Which of the following questions best describes why an independent auditor is asked to give an…

A: It is the responsibility of management to maintain books of accounts, sound internal controls…

Q: In considering materiality for planning purposes, an auditor believes that misstatements aggregating…

A: It would be appropriate to design auditing procedures that would be expected to detect misstatements…

Q: In which one of the following circumstances is the improper description of accounting policies and…

A: A error or misstatement in a financial statement is said to be material if it can affect the…

Q: When evaluating whether accounting estimates made by management are reasonable, the audit team would…

A: Accounting Estimates: Accounting estimates are the estimation of the amount to be deducted or…

Q: Which of the following statements is most likely to be included in an attorney letter?a. “Certain…

A:

Q: orts important to users of financial statements and why it is desirable to have standard wording for…

A: Auditors refer to the entity whose vital job is to check or investigate all the financial documents…

Q: Given the economic and time constraints in which auditors can collect evidence about management…

A: Financial statements are the statements that are prepared at the end of the period in order to…

Q: Which of the following best describes why an independent auditor is asked to expressan opinion on…

A:

Q: Which of the following statements is not true with respect to the auditors’ report on…

A: Internal Control: Internal control is a mechanism or procedure that the company implements so that…

Q: What possible actions would an auditor might take if a client’s financial statements depart from…

A: Introduction: A set of financial statements summarizes a company's monetary results, financial…

Q: The SEC notes, with respect to materiality, that Group of answer choices Professional judgment…

A: The auditor is responsible for forming an opinion on the financial statement audited. The auditor…

Q: Which of the following best demonstrates the concept of professional skepticism?a. Relying more…

A: Answer:   Option c.

Q: What steps should auditors take if during a compilation engagement they become aware that the…

A: Auditing:   Auditing is a gathering of information and evaluation of evidence as to report on the…

Q: Which of the following best describes the role of analytical procedures near the end of theaudit…

A: Analytical procedures are performed near the end of audit engagement to provide an overall review of…

Q: Auditors allocate the preliminary judgment about materiality to financial statement segments rather…

A: Audit:   It is an independent examination of the financial information of an organization to test…

Q: materiality

A: The first statement is true because the transactions of personal capacity affect the business entity…

Q: concept of reliability

A: Which of the following situations violates the concept of reliability? Correct Answer is :-  1,2 and…

Q: What type of opinion is issued by the auditorr if he or she is unable to determine the overall…

A: Introduction: The act of examining, confirming, and analyzing all financial information and papers…

Q: When evaluating whether accounting estimates made by management are reasonable, auditors would be…

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

Q: Which of the following statements are not true about auditors responsibilities? a) The financial…

A: The responsibility for preparation and presentation of financial statements is the responsibility of…

Q: The amount of subjectivity involved in establishing fair value estimates can be complex for…

A: GIVEN   The amount of subjectivity involved in establishing fair value estimates can be complex for…

Q: Which of the following is not part of audit evidence? Information gathered by the auditors from…

A: Audit evidence means supportings or related documentation which proves truth about the financial…

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: discuss the type of opinion is issued by the auditorr if he or she is unable to determine the…

A: Introduction: Auditing is the process of verifying, validating, and continuously investigating all…

Q: The existence of audit risk is recognized by the statement in the auditor's standard report that the…

A: An auditor is a person who is responsible for auditing the financial statements of a company and…

Q: . To express an opinion on financial statements, the auditor obtains reasonable assurance about…

A: Opinion of the auditor: To express an opinion on financial statements, the auditor obtains…

Q: Auditors often use a client's historical experience and subsequent transactions to evaluate the…

A: Auditors are responsible for the checking accounts and see that they are prepared with as per…

Q: Which of the following statements regarding audit evidence is generally correct?    The auditor's…

A: SOLUTION- The auditor must obtain a sufficient amount of relevant and reliable evidence to form an…

Q: Analytical procedures consist of evaluations of financial informationmade by a study of plausible…

A:

Q: What type of opinion is issued by the auditor if he or she is unable to determine the overall…

A: Introduction: The process of checking, validating, and conducting an investigation of all financial…

Q: Which of the following statements are not true about auditors responsibilities? a) The financial…

A: As per ISA 200, The auditor's objectives are to obtain reasonable assurance about whether the…

Q: When auditing estimates, auditors will propose adjusting entries for differences in judgment.…

A: Adjusting entries are the entries made at the end of the period to adjust the prepayments and the…

Q: Which of the following statements about materiality is considered true? a. Materiality is judged by…

A: Materiality means the items which is important while studying the financial statement and which is…

Q: Would it be possible to be objective when auditing a friend's financial statements?  If you think,…

A: An auditor’s independence refers to the independence of the auditor from the parties that are…

Q: Define and give examples of off-balance-sheet information. Why should auditors be concerned with…

A:

Q: What tyype of opinion is issued by the auditor if he or she is unable to determine the overall…

A: Introduction: In an audit report, an auditor's opinion is conveyed. An initial portion of the audit…

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: Discuss various type  of opinion is issued by the auditorr if he or she is unable to determine the…

A: Introduction: The act of recognizing, validating, and continuing to study all financial forms and…

Q: What is the problem with an auditor overrelying on management’s representations on the financial…

A: Solution: Introduction: An auditor is a person or firm of auditor(s) who is a qualified and…

Q: Question 1 Which of the following is not true about the review of historical financial statements?…

A: A)REVIEW ENDS UP WITH PREPARING A REPORT ON THE RELIABILITY OF THE FINANCIAL STATEMENT: It refers to…