Exam 8: Audit Planning and Analytical Procedures

Due to qualitative factors,certain types of misstatements are likely to be more important to users than others,even if the dollar amounts are the same.Identify two qualitative factors that might significantly affect an auditor's materiality judgment,and give an example of each.

When selecting staff for the audit engagement

Which of the following would not be classified as an analytical procedure?

List the five steps in applying materiality in an audit.

As acceptable audit risk is decreased,the likely cost of conducting an audit increases.

An auditor must evaluate a specialist's professional qualifications and understand the objectives of the specialist's work.

A tour of the client's facilities provides the auditor an opportunity to

The auditor uses knowledge gained from the understanding of the client's business and industry to assess

Sampling risk results if the sample accurately represents the population.

A major consideration in audit staffing is the need for continuity from year to year.

Which of the following statements is True concerning the allocation of preliminary materiality?

The two major factors affecting acceptable audit risk are

Assessing acceptable audit risk,client business risk,and risk of material misstatement helps determine the audit procedures that will be needed.

Qualitative factors can affect an auditor's assessment of materiality.Which of the following statements is True? I. Misstatements that are otherwise immaterial may be material if they affect earnings trends. II. Misstatements that are otherwise minor may be material if there are possible consequences arising from contractual obligations.

When analyzing a client's performance measurement system,

Which of the following best expresses the understanding of the terms of the engagement that exist between the client and the CPA firm?

If the auditor approaches the audit of the accounts in s sequential manner,the findings of the audit of accounts audited earlier can be used to revise the performance materiality established for accounts audited later.

Statements on Auditing Standards provide detailed,objective guidance on how auditors are to establish a preliminary materiality level,thus eliminating the need for subjective auditor judgment in this task.

The purpose of the requirement in having communication between the predecessor and successor auditors is to

If the preliminary judgment of materiality increases,the amount of audit evidence required will decrease.