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EP AUDITING+ASSURANCE...-MYACCT.LAB
16th Edition
ISBN: 9780134148656
Author: ARENS
Publisher: PEARSON CO
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Chapter 19, Problem 7RQ
To determine
Discuss the reason for the audit of prepaid insurance should ordinarily take a relatively small amount of audit time if the client assessed control risk for acquisition is low.
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Students have asked these similar questions
In the framework of audit and assurance, we are investigating the consequences of expectation gaps for fraud.
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
How does control risk affect the nature, timing, and extent of further audit procedures?
Chapter 19 Solutions
EP AUDITING+ASSURANCE...-MYACCT.LAB
Ch. 19 - Identify three asset accounts, three expense...Ch. 19 - Explain the relationship between substantive tests...Ch. 19 - Prob. 3RQCh. 19 - Prob. 4RQCh. 19 - Prob. 5RQCh. 19 - Prob. 6RQCh. 19 - Prob. 7RQCh. 19 - Prob. 8RQCh. 19 - Prob. 9RQCh. 19 - Which documents will be used to verify accrued...
Ch. 19 - Prob. 11RQCh. 19 - Prob. 12RQCh. 19 - Prob. 13RQCh. 19 - Prob. 14RQCh. 19 - Prob. 15.3MCQCh. 19 - Prob. 15.1MCQCh. 19 - Prob. 15.2MCQCh. 19 - Prob. 16.1MCQCh. 19 - Prob. 16.2MCQCh. 19 - Prob. 16.3MCQCh. 19 - Prob. 17.1MCQCh. 19 - Prob. 17.3MCQCh. 19 - Prob. 17.2MCQCh. 19 - Prob. 18.1MCQCh. 19 - Prob. 18.2MCQCh. 19 - Prob. 18.3MCQCh. 19 - Prob. 19DQPCh. 19 - Prob. 20DQPCh. 19 - Prob. 21DQPCh. 19 - Prob. 22DQPCh. 19 - Prob. 23DQPCh. 19 - Prob. 24DQPCh. 19 - You are auditing the financial statements of...Ch. 19 - Prob. 29DQPCh. 19 - Prob. 26DQPCh. 19 - Prob. 27DQPCh. 19 - Prob. 28DQP
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- Generally, which of the following audit procedures is the least expensive to perform? A. Analytical procedures B. Tests of details of balance C. Substantive tests of transactions D. Tests of controls E. Risk assessment procedurearrow_forwardExplain why auditing is important in lowering the risk associated with information.arrow_forwardExamining the implications of expectation gaps in the context of audit and assurance on fraudarrow_forward
- Generally, which of the following audit procedures is the least expensive to perform? A. Analytical procedures B. Tests of details of balance C. Substantive tests of transactions D. Tests of controls E. Risk assessment proceduresarrow_forwardSome account balances such as those for pensions and leases are the result of complex calculations. The susceptibility to material misstatements in these types of accounts is defined as a. Sampling risk b. Detection risk c. Inherent risk. d. audit riskarrow_forwardHow is the audit risk model used to plan the audit?arrow_forward
- Distinguish between the evaluation of the adequacy of insurancecoverage and the verification of prepaid insurance. Explain which is more important ina typical auditarrow_forwardAssuming a lack of internal control in a client's system, the risk of material misstatement is known as? O Inherent risk Client risk O Detection risk O Audit riskarrow_forwardAre internal controls required even if an auditor doesn't plan to rely on them in his audit? Explain.arrow_forward
- Your audit client is under intense pressure to meet an earnings target. Which transaction assertion for purchases is most at risk. Occurrence Accuracy Completeness Classificationarrow_forwardFor an audit, what should be considered when understanding a client and analyzing the risks?arrow_forwardWhen would an auditor prefer to conduct a black-box audit? What about a white-box audit?arrow_forward
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