Explanation The audit risk model can be better explained in following two scenarios Higher risk of material misstatement − When the Inherent risk and control risks are at 100%, the audit risk is about 1% or minimum or it can be said that there are very less chances of existence of a material misstatement...

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 53RSCQ

To determine

Introduction:Detection risk is the risk that the auditor shall not be able to identify the defect in a material statement. Audit risk and detection risk both are relevant to the Auditor; at the same time Inherent risk and Control Risk are beyond control of the Auditor.

To state: the case where the auditor will perform highest amount of detailed checking of system.

Expert Solution & Answer

Chapter 7 Solutions

Auditing: A Risk Based-Approach to Conducting a Quality Audit

Ch. 7 - Prob. 1TFQ Ch. 7 - Prob. 2TFQ Ch. 7 - Prob. 3TFQ Ch. 7 - Prob. 4TFQ Ch. 7 - Prob. 5TFQ Ch. 7 - Prob. 6TFQ Ch. 7 - Prob. 7TFQ Ch. 7 - Prob. 8TFQ Ch. 7 - Prob. 9TFQ Ch. 7 - Prob. 10TFQ

Ch. 7 - Prob. 11TFQ Ch. 7 - Prob. 12TFQ Ch. 7 - Prob. 13TFQ Ch. 7 - In terms of the timing of the risk response, the...Ch. 7 - Prob. 15MCQ Ch. 7 - Prob. 16MCQ Ch. 7 - Prob. 17MCQ Ch. 7 - Prob. 18MCQ Ch. 7 - Prob. 19MCQ Ch. 7 - Prob. 20MCQ Ch. 7 - Prob. 21MCQ Ch. 7 - Prob. 22MCQ Ch. 7 - Prob. 23MCQ Ch. 7 - Prob. 24MCQ Ch. 7 - Prob. 25MCQ Ch. 7 - Prob. 26MCQ Ch. 7 - Prob. 27MCQ Ch. 7 - Prob. 28MCQ Ch. 7 - Prob. 29RSCQ Ch. 7 - Prob. 30RSCQ Ch. 7 - Define the following terms: (a) performance...Ch. 7 - Prob. 32RSCQ Ch. 7 - Prob. 34RSCQ Ch. 7 - Prob. 35RSCQ Ch. 7 - Prob. 36RSCQ Ch. 7 - How does inherent risk relate to internal...Ch. 7 - Prob. 38RSCQ Ch. 7 - Prob. 39RSCQ Ch. 7 - Prob. 40RSCQ Ch. 7 - Prob. 43RSCQ Ch. 7 - Prob. 45RSCQ Ch. 7 - Prob. 46RSCQ Ch. 7 - Prob. 47RSCQ Ch. 7 - Prob. 48RSCQ Ch. 7 - Prob. 49RSCQ Ch. 7 - Prob. 52RSCQ Ch. 7 - Prob. 53RSCQ Ch. 7 - Prob. 54RSCQ Ch. 7 - Prob. 55RSCQ Ch. 7 - Prob. 56RSCQ Ch. 7 - Prob. 57RSCQ Ch. 7 - Prob. 58FF

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Similar questions

Refer to Exhibit 2.5 and answer the following questions. a. (Sections 101, 104, and 105) How does the establishment and operation of the PCAOB help to ensure quality external audits? How will audit firm inspections and investigations by the PCAOB help ensure high audit quality? b. (Sections 201-203) How do Sections 201-203 address audit ()r independence concerns? c. (Section 206) What is a cooling-off period, and how does it address auditor independence concerns? d. (Section 301) How do the audit committee requirements help ensure effective corporate governance? e. (Sections 302 and 906) How do the officer certification requirements help to address the risk of fraud in publicly traded organizations? What is the likelihood that a CFO who is committing fraudulent financial reporting would sign the certification falsely, and what are your reactions to that possibility? f. (Section 401) How does this section relate to the Enron fraud? g. (Section 404) How do the management assessment and audit or attestation of internal controls contained in this section help to address the risk of fraud in publicly traded organizations? h. (Section 407) Why is it important that at least one member of the audit committee be a financial expert? What are the financial reporting implications if the audit committee does not have any individuals serving on it who possess financial expertise? i. (Section 802) How does this section relate to the Enron fraud?

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