Provide an example of a situation in which the performance of tests of controls for the internal control audit might affect the performance of substantive procedures in a financial statement audit.

Risk assessment procedures are performed by auditors to: a. detect material misstatements in the financial statements. b. distribute the information needed to perform control activities. c. express an opinion on the financial statements. d. identify and assess the risks in achieving the entity’s objectives.

Consider the concepts of sufficient and appropriate audit evidence. Assess how audit risk relates to audit evidence. How do auditors audit accounting estimates and other subjective information? What are analytical procedures, and why are they a useful audit tool? Explain the importance of audit documentation.

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

Explain the components and objectives of audit risk? How is audit risk involved in assessing the likelihood that fraud may occur and where it's most likely to occur within the financial statements? How does risk assessment during the planning stage of an audit impact the tone for the entire audit engagement?

Which of the following statements is correct concerning analytical procedures used in planning an audit engagement?a. They often replace the tests of controls that are performed to assess control risk.b. They typically use financial and nonfinancial data aggregated at a high level.c. They usually involve the comparison of assertions developed by management to ratios calculated by an auditor.d. They are often used to develop an auditor’s preliminary judgment about materiality.

Explain substantive tests of transactions and the meaning of this term?  How does it apply to auditing?

Which of the following is NOT a task performed in the audit planning phase? a. reviewing an organization’s policies and practicesb. determining the degree of reliance on controls c. reviewing general controls d. planning substantive testing procedures

Which of the following internal audit assessments belong to specific governance processes? a. Whistleblower process.  b. Risk management audit process  c. Internal control over financial reporting.  d. Fraud risks.

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. The susceptibility of an assertion in an account or disclosure to a misstatement before consideration of any related controls Inherent risk The risk that a misstatement that could occur will not be prevented, or detected and corrected, on a timely basis by the entity’s internal control. Control risk The risk that the procedures performed by the auditor will not detect a misstatement that could be material. Detection risk c. Explain how these components are interrelated.