Exam 8: Risk Responseperforming Tests of Controls

The auditor always needs to investigate any control exceptions (deviations) that he or she identifies during testing to find out, to the extent practical, _______.

An observed condition that provides evidence that the control being tested did not operate as intended is called a/an _______.

In preparing a working paper for tests of controls, _______.

If there is a high risk of material fraud related to an assertion, _______.

Tolerable deviation rate is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level control risk.

The technique that involves the auditor using questioning skills to determine how the control is completed and whether it appears to have been carried out properly and on a timely basis is known as _______.

The extent of the auditor's documentation will increase if _______.

In the given table, match the components of working paper on the left with their details on the right.

The fourth step in assessing control risk is _______.

In the given table, match the concepts related to control risks on the left with the descriptions on the right.

Auditors of both public companies and private entities _______.

If the auditor wants to test using the _______ technique, he must find evidence that the control was performed on a timely basis.

Which of the following refer(s) to the audit procedures designed to evaluate the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements at the assertion level?

Assessing control risk begins with understanding entity-level controls.

If the auditor determines that an internal control deficiency is either a significant deficiency or a control deficiency, the auditor will issue a/an _______ on internal controls over financial reporting (ICFR). [unqualified opinion] | adverse opinion | modified opinion | unmodified opinion

Bob Jensen is the staff auditor on the Banson Fashion audit.Bob performed tests of controls over the control "the accounts receivable subsidiary ledger reconciliation is reviewed by the financial controller".The objective of the test was to verify that a review by the financial controller occurred on a timely basis.When performing the testing, however, Bob found that while there was evidence of the review (a signature), there was no date, so timeliness could not be verified.What can Bob conclude from this test result and what should Bob do next?

After the auditor has completed test of controls and drawn a conclusion about control risk, _______.

A common software-based audit technique involves _______.

If the auditor intends to assess control risk at a low level, _______.

After the auditor completes test of controls and draws conclusion about control risk, the auditor makes decisions about the nature, timing, and extent of _______. [substantive testing] | sampling risk | non-sampling risk | control exception