ACP AUDITING - RISK BASED APPROACH
10th Edition
ISBN: 9780357195079
Author: JOHNSTONE
Publisher: CENGAGE C
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Question
Chapter 7, Problem 22MCQ
To determine
Introduction:
Control risk are the risks that there is a probability of material misstatement of financial statement due to failures of internal controls in a business. Due to control failures, a business has more risks to experience unaccounted losses. It means there is a misstatement of financial statements wherein these reflect a profit when actually there was a loss.
To choose:The option which is true regarding control risk
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Students have asked these similar questions
When obtaining an understanding of an entity’s internal control, an auditor should concentrate on the substance ofcontrols rather than their form because:Select one:
a.
Management may establish appropriate controls but not enforce compliance with them.
b.
The controls may be operating effectively but may not be documented.
c.
The controls may be so inappropriate that no reliance is contemplated by the auditor.
d.
Management may implement controls whose costs exceed their benefits.
Which statement is false?
a. If control risk is assessed as low, the auditor cannot plan on relying on the controls to increase substantive procedures for account balances.
b. The auditor will not perform tests of controls; instead, the auditor must plan for substantive procedures, without relying on the client's internal controls.
c. Based on obtaining an understanding through risk assessment procedures, the auditor assesses control risk ranging from high (weak controls) to low (strong controls).
d. Assessing control risk as high means the auditor does not have confidence that internal controls will prevent or detect material misstatements; assessing control risk as low has the opposite implication.
A related party transaction is a transfer of resources, services, or obligations between related parties when no consideration is involved.
The auditor assesses control risk as high or at the maximum level when the internal controls of the client have not been effectively designed or have not operated effectively.
Group of answer choices
False, False
True, False
True, True
False, True
Chapter 7 Solutions
ACP AUDITING - RISK BASED APPROACH
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
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