Auditing is based on the assumption that financial data and statements are A. Verifiable B. Consistently applied C. Presented fairly D. In conformity with appropriate criteria
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- Activities carried out by the auditor using comparisons and relationships of accounts or data to assess whether the said accounts or data make sense (appear reasonable) are ...a. analytical proceduresb. comparing the accountsc. vertical analysisd. relationship modelWhen auditing account balances of liabilities, auditors are most concerned with management’s assertion abouta. Existence.b. Rights and obligations.c. Completeness.d. Valuation and allocation.The auditor's assessment of the reliability and sufficiency of the information contained in the underlying accounting records is a part of ______________ a. Audit Test b. Comparison c. Evaluation d. Judgement
- In auditing the accrued liabilities account on the Balance Sheet, an auditor’s procedures most likely would focus primarily on management’s assertion ofa. Existence or occurrence.b. Completeness.c. Presentation and disclosure.d. Valuation or allocation.Explain the concept of “Reasonable Assurance” in the context of financial statement audit.The auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of auditing procedures and in evaluating the results of those procedures. Required: a. Define audit risk b. Describe the components of audit risk (e.g., inherent risk, control risk, and detection risk). c. Explain how these components are interrelated
- An audit can have significant effect on A. Financial risk B. Business risk C. Information risk D. Solvency riskDefine and contrast financial statement auditing, attestation, and assurance services.When auditing the accounts receivable account on the balance sheet, an auditor’s procedures most likely would focus primarily on management’s assertion ofa. Existence.b. Completeness.c. Presentation and disclosure.d. Rights and obligations.
- When auditing the accounts payable balance on the balance sheet, an auditor’s procedures most likely would focus primarily on management’s assertion of Select one: a. Rights and obligations b. Completeness. c. Existence d. Presentation and disclosureDirection: summarize each step of the risk-based audit process. Testing of ControlsPerforming substantive proceduresOverall review of the financial statementsIssuing audit reportThe auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of auditing procedures and in evaluating the results of those procedures. Required: a. Define audit risk. b. Describe the components of audit risk (e.g., inherent risk, control risk, and detection risk). c. Explain how these components are interrelated. (AICPA, adapted)