Exam 6: Audit Planning and Risk Assessment

Scaling the audit refers to

An audit plan will be the same regardless of whether the client company outsources its financial activities to a service provider or conducts the activities in house.

Auditors may obtain information about a client company during other engagements conducted for the client such as

It is important for auditors to be on-location on the last day of the client's fiscal year when the client

To properly instruct and review the work of audit team members, the supervising auditor must:

Substantive audit procedures are performed so that the auditor may identify

Deliverables refers to the

Audit firms use time budgets for

If audit tests are performed at an interim date, supplemental audit evidence:

One of the first procedures performed by auditors during on-location audit work is the

Which of the following is not a relevant consideration in deciding whether an IT specialist is needed:

For accounts that involve significant estimates, require a high degree of judgment, or are susceptible to management override of controls, a principal auditor may completely rely on the work of others in determining whether those accounts are materially misstated.

When audit clients acquire new, more sophisticated IT systems,

A principal auditor may share responsibility for an audit opinion when another auditor performs all of the audit procedures for subsidiary of the client company.

Planning is a continuous process that must occur throughout the audit engagement because

Following are the planning steps involved in considering materiality in a top-down approach to planning for tests of controls. Number the items in from 1 (top) through 6 (bottom) to indicate the proper top-down sequence of the steps. ___ Identify risks that could cause material misstatement of relevant assertions in a significant account. ___ Set financial statement level materiality ___ Design audit procedures addressing controls ___ Investigate controls addressing risks ___ Identify significant accounts ___ Determine relevant management assertions for significant accounts and set materiality at the account level

Significant developments in the client's external environment that affect audit strategy include:

The audit planning meeting must

A principal auditor may share responsibility for an audit opinion with

Computers are the primary resources used on an audit.