Exam 6: Assessing Risks in an Audit Engagement

On the basis of audit evidence gathered and evaluated,an auditor decides to increase the assessed level of control risk from that originally planned.To achieve an overall audit risk level that is substantially the same as the planned audit risk level,the auditor would ________.

The business process view also highlights the fact that business organizations ________.

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

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 ________.

Explain the relationships among the business processes and accounting processes (or cycles)and how it affects the auditors planned audit procedures.

Canadian auditing standards require an assessment of client's business for every audit,risk as part of a risk-based audit approach.

The ultimate purpose of assessing control risk is to contribute to the auditor's evaluation of the ________.

An organization with a very hierarchical structure is typical of companies in complex business environments as this structure reduces the ability of a junior employee to make a wrong decision.

Discuss four ways of managing risk in an organization.

Theoretically,when assessing the inherent risk related to an account balance,an auditor does not explicitly consider the ________.

An auditor considers two factors in understanding business risks.What are they?

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

Auditors find it easier to audit related accounts instead of attacking each account individually.

Control testing procedures provide no direct evidence of material misstatements in the auditee's statements

Audit procedures designed to verify that overhead costs are properly included in cost of goods sold,most closely relate to which assertion(s)?

Decisions involving the proper application of GAAP primarily involve which management assertion? Give some examples.

An auditor begins the identification of business risks by doing what?

The valuation assertion includes ________.

What factors are considered as part of the auditor's assessment of client business risks?

Give some examples of cut off errors and explain what management assertions are affected by such errors.