Question 1

As detection risk increases, the amount of evidence an auditor needs to obtain decreases.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following factors will result in control risk being assessed at a higher level?

Accepted Answer

A)  Controls are well designed. 
B)  There is a lack of supervision of accounting personnel. 
C)  Accounting staff are well trained and educated. 
D)  The control environment is operating effectively. 
A)  Controls are well designed. 
B)  There is a lack of supervision of accounting personnel. 
C)  Accounting staff are well trained and educated. 
D)  The control environment is operating effectively.

Question 3

Which of the following are common brainstorming session guidelines?

Accepted Answer

A)  Freedom of expression. 
B)  Respectful communication. 
C)  Suspension of criticism. 
D)  All of the above. 
A)  Freedom of expression. 
B)  Respectful communication. 
C)  Suspension of criticism. 
D)  All of the above.

Question 4

Which of the following risk factors suggests a heightened level of risk of material misstatement?

Accepted Answer

A)  Having a stable product. 
B)  The departure of key personnel of a company. 
C)  Few immaterial related-party transactions. 
D)  Declining a merger with another company. 
A)  Having a stable product. 
B)  The departure of key personnel of a company. 
C)  Few immaterial related-party transactions. 
D)  Declining a merger with another company.

Question 5

Which of the following phrases or terms regarding materiality is used by the Supreme Court of the United States and is not found in FASB Concepts Statement No. 2?

Accepted Answer

A)  "amount of a misstatement or omission" 
B)  "in light of surrounding circumstances" 
C)  "probable that the judgement of a reasonable person" 
D)  "significantly altered the total mix of information available" 
A)  "amount of a misstatement or omission" 
B)  "in light of surrounding circumstances" 
C)  "probable that the judgement of a reasonable person" 
D)  "significantly altered the total mix of information available"

Question 6

Brainstorming.
What are the steps of the brainstorming process?

Accepted Answer

The steps of the brainstorming process a

Question 7

Risk Responses.
When considering risk responses, what steps should the auditor take?

Accepted Answer

An auditor should do the following when

Question 8

The internal controls of an organization have no impact on the efficiency of an audit.

Accepted Answer

A) True 
 B)False

Question 9

The purpose of tests of controls are to provide reasonable assurance that internal controls are operating effectively.

Accepted Answer

A) True 
 B)False

Question 10

Tolerable misstatement is the amount of misstatement in an account balance that the auditor could tolerate and still not judge the underlying account balance to be materially misstated.

Accepted Answer

A) True 
 B)False

Question 11

If detection risk is low, the auditor is more willing to take a higher risk of the substantive audit procedures not detecting a material misstatement.

Accepted Answer

A) True 
 B)False

Question 12

Auditors are only concerned with materiality for the financial statements as a whole.

Accepted Answer

A) True 
 B)False

As detection risk increases, the amount of evidence an auditor needs to obtain decreases.

Which of the following factors will result in control risk being assessed at a higher level?

Which of the following are common brainstorming session guidelines?

Which of the following risk factors suggests a heightened level of risk of material misstatement?

Which of the following phrases or terms regarding materiality is used by the Supreme Court of the United States and is not found in FASB Concepts Statement No. 2?

Brainstorming. What are the steps of the brainstorming process?

Risk Responses. When considering risk responses, what steps should the auditor take?

The internal controls of an organization have no impact on the efficiency of an audit.

The purpose of tests of controls are to provide reasonable assurance that internal controls are operating effectively.

Tolerable misstatement is the amount of misstatement in an account balance that the auditor could tolerate and still not judge the underlying account balance to be materially misstated.

If detection risk is low, the auditor is more willing to take a higher risk of the substantive audit procedures not detecting a material misstatement.

Auditors are only concerned with materiality for the financial statements as a whole.

Auditing: Integral to the Economy

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

Filters

Exam 7: Planning the Audit: Identifying and Responding to the Risks of Material Misstatement

As detection risk increases, the amount of evidence an auditor needs to obtain decreases.

Which of the following factors will result in control risk being assessed at a higher level?

Which of the following are common brainstorming session guidelines?

Which of the following risk factors suggests a heightened level of risk of material misstatement?

Which of the following phrases or terms regarding materiality is used by the Supreme Court of the United States and is not found in FASB Concepts Statement No. 2?

Brainstorming. What are the steps of the brainstorming process?

Risk Responses. When considering risk responses, what steps should the auditor take?

The internal controls of an organization have no impact on the efficiency of an audit.

The purpose of tests of controls are to provide reasonable assurance that internal controls are operating effectively.

Tolerable misstatement is the amount of misstatement in an account balance that the auditor could tolerate and still not judge the underlying account balance to be materially misstated.

If detection risk is low, the auditor is more willing to take a higher risk of the substantive audit procedures not detecting a material misstatement.

Auditors are only concerned with materiality for the financial statements as a whole.

Auditing: Integral to the Economy

The Auditors Responsibilities Regarding Fraud and Mechanisms to Address Fraud: Regulation and Corporate Governance

Internal Control Over Financial Reporting: Responsibilities of Management and the External Auditors

Professional Liability, Auditor Judgment Frameworks, and Professional Responsibilities

Professional Auditing Standards and the Audit Opinion Formulation Process

A Framework for Audit Evidence

Specialized Audit Tools: Sampling and Generalized Audit Software

Auditing the Revenue Cycle

Auditing Cash and Marketable Securities

Auditing Inventory, Goods and Services, and Accounts Payable: the Acquisition and Payment Cycle

Auditing Long-Lived Assets: Acquisition, Use, Impairment, and Disposal

Auditing Debt Obligations and Stockholders Equity Transactions

Activities Required in Completing a Quality Audit

Audit Reports on Financial Statements

Advanced Topics Concerning Complex Auditing Judgments

Other Services Provided by Audit Firms

Filters