Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Question
Chapter 7, Problem 12TFQ
To determine
Introduction:
When the financial statements are misstated, the auditor is not very optimistic about expressing audit opinions as there is a chance of wrong expression of audit results due to existence of fraud and error in the statements. Hence, the audit risk is set at a low level.
To choose:Whether the statement is true or false
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Students have asked these similar questions
The auditors assessed risk of material misstatement at 0.50 and said they wanted to achieve a0.05 risk of failing to express a correct opinion on financial statements that were materiallymisstated. What detection risk do the auditors plan to use for planning the remainder of theaudit work?a. 0.20.b. 0.10.c. 0.75.d. 0.00
2)
During the audit of a client you come to the conclusion that there is minimal likelihood that resolution of an uncertainty will have a material effect on the financial report. Accordingly, assuming nothing else has come to your attention, you should issue:
a.
A qualified opinion.
b.
An unmodified opinion.
c.
An adverse opinion.
d.
A disclaimer of opinion.
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
Chapter 7 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 7 - Prob. 1TFQCh. 7 - Prob. 2TFQCh. 7 - Prob. 3TFQCh. 7 - Prob. 4TFQCh. 7 - Prob. 5TFQCh. 7 - Prob. 6TFQCh. 7 - Prob. 7TFQCh. 7 - Prob. 8TFQCh. 7 - Prob. 9TFQCh. 7 - Prob. 10TFQ
Ch. 7 - Prob. 11TFQCh. 7 - Prob. 12TFQCh. 7 - Prob. 13TFQCh. 7 - In terms of the timing of the risk response, the...Ch. 7 - Prob. 15MCQCh. 7 - Prob. 16MCQCh. 7 - Prob. 17MCQCh. 7 - Prob. 18MCQCh. 7 - Prob. 19MCQCh. 7 - Prob. 20MCQCh. 7 - Prob. 21MCQCh. 7 - Prob. 22MCQCh. 7 - Prob. 23MCQCh. 7 - Prob. 24MCQCh. 7 - Prob. 25MCQCh. 7 - Prob. 26MCQCh. 7 - Prob. 27MCQCh. 7 - Prob. 28MCQCh. 7 - Prob. 29RSCQCh. 7 - Prob. 30RSCQCh. 7 - Define the following terms: (a) performance...Ch. 7 - Prob. 32RSCQCh. 7 - Prob. 34RSCQCh. 7 - Prob. 35RSCQCh. 7 - Prob. 36RSCQCh. 7 - How does inherent risk relate to internal...Ch. 7 - Prob. 38RSCQCh. 7 - Prob. 39RSCQCh. 7 - Prob. 40RSCQCh. 7 - Prob. 43RSCQCh. 7 - Prob. 45RSCQCh. 7 - Prob. 46RSCQCh. 7 - Prob. 47RSCQCh. 7 - Prob. 48RSCQCh. 7 - Prob. 49RSCQCh. 7 - Prob. 52RSCQCh. 7 - Prob. 53RSCQCh. 7 - Prob. 54RSCQCh. 7 - Prob. 55RSCQCh. 7 - Prob. 56RSCQCh. 7 - Prob. 57RSCQCh. 7 - Prob. 58FF
Knowledge Booster
Similar questions
- Which sentence below is true about audit risk: A. Audit risk is the risk that a company may hire an incompetent auditor. B. Audit risk can be completely eliminated through appropriate sampling of transactions. C. Audit is what creates the demand for an audit. D. Audit risk is the risk that a "clean" opinion will be issued when, in reality, the financial statements are materially misstated..arrow_forwardThe tolerable rate of deviation set by the auditor for tests of controls depends primarily on which of the following? a. The planned risk of assessing control risk too low. b. The dollar amount of substantive misstatements. c. The anticipated cause of the errors. d. The tolerable rate used in audits of other clients in the same industry.arrow_forwardThe auditor is typically concerned with two major types of mistakes that materially impact the financial statements when testing controls and when performing substantive testing. Identify the pair of the major mistakes as: A) Risk of Assessing Control Risk Too Low/Risk of Incorrect Rejection B) Risk of Assessing Control risk Too High/Risk of Incorrect Rejection C) Risk of Assessing Control Risk Too Low/Risk of Incorrect Acceptancearrow_forward
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