Question 1

The acceptable level of detection risk is inversely related to the ________.

Accepted Answer

A) assurance provided by substantive tests 
B) risk of misapplying auditing procedures 
C) preliminary judgment about materiality levels 
D) risk of failing to discover material misstatements 
A) assurance provided by substantive tests 
B) risk of misapplying auditing procedures 
C) preliminary judgment about materiality levels 
D) risk of failing to discover material misstatements

Question 2

Business processes can be thought of as a structured set of activities within an entity.

Accepted Answer

A) True 
 B)False

Question 3

The existence of audit risk is recognized by the statement in the auditor's standard report that the auditor ________.

Accepted Answer

A) obtains reasonable assurance about whether the financial statements are free of material misstatement 
B) assesses the accounting principles used and also evaluates the overall financial statement presentation 
C) realizes some matters,either individually or in the aggregate,are important while other matters are not important 
D) is responsible for expressing an opinion on the financial statements,which are the responsibility of management 
A) obtains reasonable assurance about whether the financial statements are free of material misstatement 
B) assesses the accounting principles used and also evaluates the overall financial statement presentation 
C) realizes some matters,either individually or in the aggregate,are important while other matters are not important 
D) is responsible for expressing an opinion on the financial statements,which are the responsibility of management

Question 4

To assess the risk of material misstatement at the financial statement level,the auditor needs a detailed knowledge of internal control components relevant to financial reporting.

Accepted Answer

A) True 
 B)False

Question 5

A critical element of control is monitoring.What is likely to happen if management fails to monitor an internal control?

Accepted Answer

A) Necessary improvements will not be identified. 
B) Personnel are likely to stop observing the control. 
C) The inherent risk of an error will increase. 
D) The auditor is likely to assume the control is working when it might not be. 
A) Necessary improvements will not be identified. 
B) Personnel are likely to stop observing the control. 
C) The inherent risk of an error will increase. 
D) The auditor is likely to assume the control is working when it might not be.

Question 6

After obtaining an understanding of the internal control system and assessing control risk,an auditor decided not to perform additional tests of controls.The auditor most likely concluded that ________.

Accepted Answer

A) the additional evidence to support a further reduction in control risk was not cost-beneficial 
B) the assessed level of inherent risk exceeded the assessed level of control risk 
C) the internal control system was properly designed and justifiably may be relied on 
D) the evidence obtainable through tests of controls would not support an increased level of control risk 
A) the additional evidence to support a further reduction in control risk was not cost-beneficial 
B) the assessed level of inherent risk exceeded the assessed level of control risk 
C) the internal control system was properly designed and justifiably may be relied on 
D) the evidence obtainable through tests of controls would not support an increased level of control risk

The acceptable level of detection risk is inversely related to the ________.

Business processes can be thought of as a structured set of activities within an entity.

The existence of audit risk is recognized by the statement in the auditor's standard report that the auditor ________.

To assess the risk of material misstatement at the financial statement level,the auditor needs a detailed knowledge of internal control components relevant to financial reporting.

A critical element of control is monitoring.What is likely to happen if management fails to monitor an internal control?

After obtaining an understanding of the internal control system and assessing control risk,an auditor decided not to perform additional tests of controls.The auditor most likely concluded that ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters

Exam 6: Assessing Risks in an Audit Engagement

The acceptable level of detection risk is inversely related to the ________.

Business processes can be thought of as a structured set of activities within an entity.

The existence of audit risk is recognized by the statement in the auditor's standard report that the auditor ________.

To assess the risk of material misstatement at the financial statement level,the auditor needs a detailed knowledge of internal control components relevant to financial reporting.

A critical element of control is monitoring.What is likely to happen if management fails to monitor an internal control?

After obtaining an understanding of the internal control system and assessing control risk,an auditor decided not to perform additional tests of controls.The auditor most likely concluded that ________.

Introduction to Auditing

Auditors Professional Roles and Responsibilities

Auditors Ethical and Legal Responsibilities

Reports on Audited Financial Statements

Preliminary Audit Planning: Understanding the Auditees Business

Internal Control Over Financial Reporting

Audit Evidence and Assurance

Control Assessment and Testing

Audit Sampling

The Revenues, Receivables, and Receipts Process and Cash Account Balance

The Purchases, Payables, and Payments Process

Payroll and Production Processes

The Finance and Investment Process

hapter 15 Completing the Audit Work

Applying Professional Judgment to Form the Audit Opinion and Issue the Audit Report

Other Public Accounting Services and Reportsreviews and Compilations

Professional Rules of Conduct Details and Auditor Responsibilities

The Audit of Accounting Estimates: Basic Material Relating to Accounting Estimates

Legal Liability Cases

Other Professional Accounting Services and Reports, Including Fraud Auditing

Filters