EBK AUDITING & ASSURANCE SERVICES: A SY
11th Edition
ISBN: 9781260687668
Author: Jr
Publisher: MCGRAW-HILL LEARNING SOLN.(CC)
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Question
Chapter 3, Problem 3.15RQ
To determine
Concept Introduction:
Tolerable misstatements means that misstatements in financial statements which is below the tolerable limit and deviations are overriding of internal
To discuss: Factors that cause auditor to use lower percentage for establishing tolerable misstatement:
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Explain how the auditor determines tolerable misstatement for MUS
MUS's auditor assesses what is an acceptable misstatement.
Which of the following regarding the level of materiality is correct? Select one: a. An increase in materiality will decrease the amount of substantive testing b. In order to decrease detection risk, the auditor would increase materiality. c. A higher risk of material misstatement will require an increase in materiality d. A decrease in materiality will result in a decrease in the cost of an audit
Chapter 3 Solutions
EBK AUDITING & ASSURANCE SERVICES: A SY
Ch. 3 - Prob. 3.1RQCh. 3 - Prob. 3.2RQCh. 3 - Prob. 3.3RQCh. 3 - Prob. 3.4RQCh. 3 - Prob. 3.5RQCh. 3 - Prob. 3.6RQCh. 3 - Prob. 3.7RQCh. 3 - Prob. 3.8RQCh. 3 - Prob. 3.9RQCh. 3 - Prob. 3.10RQ
Ch. 3 - Prob. 3.11RQCh. 3 - Prob. 3.12RQCh. 3 - Prob. 3.13RQCh. 3 - Prob. 3.14RQCh. 3 - Prob. 3.15RQCh. 3 - Prob. 3.16MCQCh. 3 - Prob. 3.17MCQCh. 3 - Prob. 3.18MCQCh. 3 - Prob. 3.19MCQCh. 3 - Prob. 3.20MCQCh. 3 - Prob. 3.21MCQCh. 3 - Prob. 3.22MCQCh. 3 - Prob. 3.23MCQCh. 3 - Prob. 3.24MCQCh. 3 - Prob. 3.25MCQCh. 3 - Prob. 3.26PCh. 3 - Prob. 3.27PCh. 3 - Prob. 3.28PCh. 3 - Prob. 3.29PCh. 3 - Prob. 3.30PCh. 3 - Prob. 3.31PCh. 3 - Prob. 3.32P
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Similar questions
- If the _______ is less than the _______, the audit team would conclude that the account balance is fairly stated.a. Projected misstatement; tolerable misstatement.b. Tolerable misstatement; projected misstatement.c. Upper limit on misstatements; tolerable misstatement.d. Tolerable misstatement; upper limit on misstatements.arrow_forwardThe risk of incorrect rejection and the risk of underreliance relate to thea. Effectiveness of the audit.b. Efficiency of the audit.c. Preliminary estimates of performance materiality.d. Tolerable misstatement.arrow_forwardThe auditor is required to document each misstatement identified as "clearly trivial." True Falsearrow_forward
- As the risk of material misstatement increases, the amount of evidence the auditor will accumulate should: Oc. Stay the same b. Increase a. Decrease d. Is indeterminatearrow_forwardWhat options are available to the audit team if the ULRD is greater than the tolerable rate of deviation?arrow_forwardWhat is the upper limit on misstatements? What information does it provide the auditor?arrow_forward
- Discuss the effect of the misstatement identified on the audit opinion.arrow_forwardThe auditor attempts to correct for the risk of under-auditing (ineffectiveness) and over-auditing (inefficiency). Which of the following statistical Factors corrects for under-auditing? A) Basic Precision B) Reliability Factor C) Achieved Upper Deviation Ratearrow_forwardWhen auditing estimates, auditors will propose adjusting entries for differences in judgment. Question options: True Falsearrow_forward
- If there is a detection of one control deviation, the auditor can do which of the following? a. Increase the sample size O b. Test a compensation control Oc. Amend the auditor's decision to rely on the control O d. All of the above are options for an auditor responding to detection of a control deviaticarrow_forwardWhat are the advantages and disadvantages of an adverse auditarrow_forwardAs auditors expect certain accounts to have more misstatements than others, both overstatements and understatements must be considered. Explain the reasons for permitting the sum of the tolerable misstatement to exceed overall materiality.arrow_forward
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