Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
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Question
Chapter 24, Problem 28DQP
a)
To determine
Explain the three types of the misstatements that can be identified by the auditor and state the factors that might suggest that the misstatement is not an isolated occurrence.
b)
To determine
State the factors that an auditor should consider in evaluating whether uncorrected misstatements are material, either individually or in the aggregate.
c)
To determine
State the auditor’s documentation required by AU-C 450.
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Explain how the auditor determines tolerable misstatement for MUS
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(a) (i) Explain the concepts of materiality and audit risk and the relationship between them?(ii) ISA 315 Identifying and assessing the risks of material misstatement requires the auditor to carry out risk assessment procedures to identify the possibility of material misstatement in the financial statements.
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Chapter 24 Solutions
Auditing and Assurance Services (16th Edition)
Ch. 24 - Prob. 1RQCh. 24 - Explain why an auditor is interested in a clients...Ch. 24 - Prob. 3RQCh. 24 - Prob. 4RQCh. 24 - Prob. 5RQCh. 24 - Prob. 6RQCh. 24 - Prob. 7RQCh. 24 - Prob. 8RQCh. 24 - What major considerations should the auditor take...Ch. 24 - Identify five audit procedures normally done as a...
Ch. 24 - Prob. 11RQCh. 24 - Prob. 12RQCh. 24 - Prob. 13RQCh. 24 - Prob. 14RQCh. 24 - Prob. 15RQCh. 24 - Prob. 16RQCh. 24 - Prob. 17RQCh. 24 - Prob. 18.1MCQCh. 24 - Prob. 18.2MCQCh. 24 - Prob. 18.3MCQCh. 24 - Prob. 18.4MCQCh. 24 - Prob. 19.1MCQCh. 24 - Prob. 19.2MCQCh. 24 - Prob. 19.3MCQCh. 24 - Prob. 20.1MCQCh. 24 - Prob. 20.2MCQCh. 24 - Prob. 20.3MCQCh. 24 - Prob. 21.1MCQCh. 24 - Prob. 21.2MCQCh. 24 - Prob. 21.3MCQCh. 24 - Prob. 22DQPCh. 24 - In an audit of the Marco Corporation as of...Ch. 24 - Prob. 24DQPCh. 24 - The field work for the June 30, 2016, audit of...Ch. 24 - Prob. 26DQPCh. 24 - Prob. 27DQPCh. 24 - Prob. 28DQPCh. 24 - Prob. 29DQPCh. 24 - Prob. 30DQP
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Similar questions
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- Which two of the following statements regarding the use of analytical procedures of the audit are correct? i. Analytical procedures are used to test the effectiveness of the design of policies. ii. Analytical procedures involves inquiries and observation of routines to obtain evidences. iii. Analytical procedures help to identify unusual fluctuations for investigation. iv. Analytical procedures can assist the auditor in planning other audit procedures. a. iii and iv b. i and ii c. ii and iv d. ii and iiiarrow_forwardIf recommendations are made to the audit report noted problems and weaknesses, written responses detailing the following are requested from the audit client: a. A corrective action plan to resolve the problem and its root cause. b. The person responsible for implementing the corrective action. c. An expected implementation date. d. All of the optionsarrow_forwardMUS's auditor assesses what is an acceptable misstatement.arrow_forward
- In auditing, ____________ is the process of identifying and assessing the risks of material misstatement in the financial statements, allowing auditors to tailor their audit procedures accordingly.arrow_forwardISA 315 Identifying and assessing the risks of material misstatement requires the auditor to carry out risk assessment procedures to identify the possibility of material misstatement in the financial statements.Required:List three activities that the auditor can perform to help gain an understanding of the entity being audited and so identify the possibility of material misstatements.arrow_forwardDiscuss the effect of the misstatement identified on the audit opinion.arrow_forward
- Which of the following terms best describes the risk that audit procedures will fail to detect material misstatements? a. Control risk. b. Inherent risk. c. Detection risk. d. Audit risk.arrow_forwardWhich of the following documents would be the most reliable evidence for an audit? Group of answer choices A. Confirmation from third party directly obtained by the audit team B. Confirmation from third party that is forwarded by the audit client. C. Observation cited in the report documented by the audit team D. Observation cited in the report documented by third party with concurrence of the audit teamarrow_forwardPlease access PCAOB Auditing Standard No. 12 "Identifying and Assessing Risks of Material Misstatements" (pcaobus.org). Use this standard to answer each of the questions below. For each answer, document the paragraph(s) in AS No. 12 supporting your answer. a. What types of information does AS No. 12 suggest the auditor should consider when obtaining an understanding of the company and its environment? b. What types of performance measurements might affect the risk of material misstatement? c. What specific issues should be included in the discussion among engagement team members regarding the risk of material misstatement? d. What factors should the auditor consider to determine if a risk is a "significant risk"? e. What guidance is provided about revising the risk assessment as the audit continues?arrow_forward
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