Which of the following would not result in exposure to nonsampling risk?a. Measuring the characteristic of interest in an inappropriate manner.b. Selecting items that are not representative of the population of interest.c. Making an unintentional mistake in measuring the characteristic of interest.d. All of the above would result in exposure to nonsampling risk.

Q: When faced with uncertainty there is a need to exercise prudence. Which of the following would be…

A: PRUDENCE IS USALLY SEEN AS A VIRTUE . HOWEVER , IT CAN BE EXCESSIVE IF IT HAS AN UNREASONABLE IMPACT…

Q: What determines the acceptable level of Detection Risk?

A: Detection Risk:   It is a chance that an auditor will fail to identify any material misstatement…

Q: Explain the difference between unique risk and systematic risk

A: Answer

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: What is the risk of Incorrect Rejection?

A: Risk of incorrect acceptance of internal control reliability and risk of incorrect acceptance of…

Q: What items could increase the risk of material misstatement?

A: Risk of material misstatement (ROMM) is a risk that the financial statements when audited will…

Q: Obtain an understanding of the client’s external controls. All things equal, as the risk of…

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

Q: Which of the following increase control risk?

A: The answer for the multiple choice question and relevant explanation are presented hereunder : What…

Q: Why would an auditor use observation to gather evidence? What are the strengths and weaknesses of…

A: solution : Why would an auditor use observation to gather evidence? What are the strengths and…

Q: Why is the audit team more concerned with the risk of overreliance than with the risk of…

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

Q: Why are auditors more concerned with the risk of incorrect acceptance than the risk of incorrect…

A: Definition:

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: Determine if the mistake is counterbalancing or noncounterbalancing. Give a specific example for…

A: The mistake is counterbalancing or noncounterbalancing will be explained:

Q: What is the criticism for using SMB and HML as risk factors?

A: The Fama and French Three-Factor Model (or Fama French Model for short) is an asset pricing model…

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: What responses should an auditor take based on different levels of acceptable detection risk (DR)?…

A: There are different ways an auditor responds to fraud risks that are assessed and it depends upon…

Q: Which of the following statements about intuitive approaches is/are false? -Ignoring or discounting…

A: The intuitive approach is the way people think or make decisions naturally and without any use of…

Q: which of the following is not a qualitative characteristic associated with Relevance? a.…

A: Financial statements should be true and fair, for presenting true and fair financial information;…

Q: Statistical sampling cannot be used to test all control activities. TRUE OR FALSE? WHY?

A: Solution : Concept Statistical sampling               In an audit two methods of sampling can be…

Q: Whare are the disadvantages of external goverment audits?

A: Government Audits generally refer to audit of performance of the Government activities with respect…

Q: The higher the risk of material misstatements the lower should audit risk be taken. True or false

A: Audit risk is the risk that an auditor expresses an inappropriate opinion.  This is the risk that…

Q: Which one of the following is the main problem with using non-probability sampling technique? a. The…

A: Nonprobability sampling is a technique where the samples are selected without the random selection…

Q: The audit risk model consists of: AR = IR x R x DR. The detection risk is the dependent variable.…

A: Detection Risk dependent on the level of inherent risk and level of control risk. The relationship…

Q: Which of the following is an advantage of nonstatistical sampling?a. It measures the audit team’s…

A: Non-statistical sampling: It refers to the method of sampling where the selection of the sample is…

Q: If nothing is known about the probabilities of the chance outcomes, what is the recommendeddecision…

A: Decision analysis is the selection of a decision from a set of possible decision alternatives when…

Q: How can an auditor reduce a client’s inherent risk?

A: Inherent risk is the risk of material misstatement assuming there are no related controls. Inherent…

Q: What are the advantages and disadvantages of an adverse audit

A: Adverse audit refers that the opinion has been provided on the financial statements that: The…

Q: What should occur when a low level of Detection Risk is acceptable?

A: Detection risk is the risk that procedures performed to reduce audit risk will not detect a material…

Q: What are the risks if the auditor concludes controls are operating effectively based on the sample…

A: Definition:   Sampling risk: Sampling risk is a risk that arises when the judgments based on the…

Q: “Total input includes abnormal as well as normal spoilage and is, therefore, inappropriate as a…

A: Inventory shrinkage: It represents the loss of inventory. In other words, it refers to the…

Q: Which one of the following is the main problem with using non-probability sampling technique? a. The…

A: Sampling is the process of choosing selections from a population.

Q: aterial misstatement exists when it does not exist     the risk that an auditor incorrectly…

A: Risk of incorrect rejection is defined as   the risk that the auditor concludes that a…

Q: There is no need to perform substantive tests procedures if the control risk is determined to be…

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

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 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: _________ factors are conditions and other variables that in their present, or absence, as the case…

A: Less start with basic understanding. For auditing being made, audit needs to make plan for…

Q: sampling plans focus on a. Rates of deviation from prescribed control procedures. b. Assessing the…

A: variable sampling is the process that is used in order to predict the value of specific variable…

Q: What options are available to the audit team if the ULRD is greater than the tolerable rate of…

A:

Q: What are the advantages and disadvantages of adverse audit Opinion

A: An adverse audit report is a major warning sign. An adverse audit report typically reveals egregious…

Q: Which of the following is NOT an advantage of using sensitivity analysis?

A: Which of the following is NOT an advantage of using sensitivity analysis? A  It identifies the…

Q: True or false: The lower the materiality level, the higher the amount of required evidence from…

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

Q: Non-sampling risk, and more specifically the risk of assessing control risk too low (risk of…

A: Non-sampling risk is the risk that auditors make an incorrect conclusion for any reason that is not…