Which of the following is consistent with an assessed level of control risk at below the maximum level after completing the auditors consideration of the client’s internal control over receivables?  Increased materiality level in selecting receivables to be confirmed and use a positive confirmation letter. Increased materiality level in selecting receivables to be confirmed and use a negative confirmation letter. Decrease materiality level in selecting receivables to be confirmed and use a negative confirmation letter. d. Decrease materiality level in selecting receivables to be confirmed and use a positive confirmat

Q: Matters that could affect the necessary extent of testing for a control activity as it related tothe…

A: Auditor: An auditor is a person who is accountable for preparing and examining financial records.…

Q: Auditors obtain reasonable assurance that financial statements are fairly stated by performing all…

A: Reasonable assurance is the term of auditing which states the level of the assurance auditors are…

Q: Which of the following does NOT accurately describe detection risk? assessed as low when control…

A: The risk that the financial statements of an entity include material misstatements is referred to as…

Q: When the client’s internal control are good, internal documents are more reliable than external True…

A: The question is related to true or false on Auditing.

Q: Auditors make materiality judgments during the planning/risk assessment phase of the audit to be…

A: Introduction: An auditor verifies the authenticity of commercial transactions that have been…

Q: Auditors make materiality judgments during the planning phase of the audit in order to be sure they…

A: 1.

Q: Which of the following is appropriate about risk assessment? A. The assessed level of inherent and…

A: Risks are the unfavourable situations or circumstances that can make loss for the organisation or…

Q: Many auditors assert that certain audit tests can be significantlyreduced for clients with adequate…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: Which of the following terms best describes the risk that audit procedures will fail to detect…

A: The Correct Option is C

Q: Which of the following statements correctly defines the term reasonable assurance? A. A substantial…

A: The objective of the auditor is to obtain high level or assurance.

Q: the susceptibility of an account balance or class of transactions to misstatements that could be…

A: Internal controls: Internal controls are maintained to decline the possibility of fraud. They ensure…

Q: If the tests of controls indicate certain controls are not as effective as the auditor originally…

A: Test of controls are performed  to determine the effectiveness of the control to detect and correct…

Q: In auditing accounts receivable, the negative form of confirmations request is used when A. Response…

A: Auditing:   Auditing refers to an independent examination of financial information of any…

Q: If the auditor uses the primarily substantive apporach instead of the lower control risk approach…

A: Control risk is one of the risk related to material misstatements in books of accounts in the…

Q: Examine the information enunciated below carefully and identify the impact of increase in the…

A: The first step in conducting audit is the assessment of audit risk inherent to the business which…

Q: Auditing standards indicate that if the preliminary control risk assessment is low, the auditor then…

A: The selection of control by the auditor is based on assessing whether the entity's controls…

Q: a. Increase in the timeliness of direction and more detailed review of work O b. None of the options…

A: The correct answer is option d.)

Q: When making a decision about the dollar amount in an account balance based on a sample, the audit…

A:

Q: Statement on Auditing Standards No. 99 (AU 316) includes which of these recommendations? Group of…

A: SAS no. 99 defines a procedure in which the auditor acquires data to find risks of significant…

Q: The risk of a material misstatement in the financial statements arising due to error or omission as…

A: Error or Omission is an unintentional mistake which leads to risk of material misstatement in the…

Q: If an audit of any of these companies is performed according to the AICPA auditing standards, and…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: The results of analytical procedures may identify previously unrecognized risk of material…

A: Analytical procedures: In obtaining the audit evidence, the auditor has to finally undergo…

Q: List two major characteristics that are useful in predicting the likelihood of fraudulent financial…

A: Audit: An audit is defined as: the independent examination of and expression of opinion on the…

Q: Once the auditor detects a control deficiency, which of the following steps must he or shetake…

A: Internal control is the process of achieving objectives in operational efficiency and effectiveness.…

Q: In an environment that is highly automated, an auditor determines that it is not possible toreduce…

A:

Q: Generally, which of the following audit procedures is the least expensive to perform?   A.…

A: Answer -  Correct Option is Option A - Analytical procedures.

Q: With respect to fraudulent financial reporting, which one of the following statements is not…

A: Auditor can obtain reasonable assurance only, not an absolute assurance.

Q: Which of the following statements about confirming accounts receivable (A/R) and accounts payable…

A: Confirmations regarding the accounts balances are one of the important elements in determining the…

Q: Which of the following is most closely related to the relevance of audit evidence?a. Auditors decide…

A: Audit: Audit is the process of verification of the compliance of the financial statements. It…

Q: If the auditor plans to assess control risk at less than the maximum and rely on controls, and the…

A:

Q: Which of the following is an incorrect statement?       a. The amount of audit work should vary…

A: The person that analyzes the books of the company is known as the auditor. The auditor checks all…

Q: To allocate the preliminary estimate of materiality to the accounts, the auditor might consider A.…

A: in order to plan the nature timining and extent of the audit procedure that is needed to perform the…

Q: Some audit procedures may be performed before the end of the reporting period. The more the auditor…

A: Auditing is done in order to know and get the report from the auditors that the financial statements…

Q: An auditor discovered the following matters while performing tests of controls: 1.An obligation for…

A: Internal Controls: The process designed, implemented, and maintained by those charged with…

Q: Which one of the following statements is most appropriate to Control risk? Susceptibility of account…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: Auditing standards require that the engagement team members engage in discussion about the…

A: Audit: It is a systematic examination of books of accounts of an individual or a firm. It is done by…

Q: On the basis of audit evidence gathered and evaluated, an auditor decides to decrease the level of…

A: Answer: Option D. Decrease in the assessed control risk.

Q: When an audior increases the assessed level of control risk because certain control activities were…

A: Answer:   Option C.

Q: When Arthus Andersen audited Enron, they should have recognized an acceptable level of detection…

A: Detection risks are the risks that the auditor will fail to find the material misstatement when that…

Q: If inherent risk is high and a reasonable level of assurance has been gained from control testing,…

A: The inherent audit risk is a risk that exists due to any error or omissions in the financial…

Q: The tolerable rate of deviation set by the auditor for tests of controls depends primarily on which…

A: The auditor should determine the maximum rate of deviations from the prescribed control that he…

Q: Generally, which of the following audit procedures is the least expensive to perform?   A.…

A: Analytical procedures are the least expensive audit procedures to perform. Test of controls are…

Q: Read the case. Then answer the questions based on it.   BACKGROUND: Audit standards indicate that…

A: Answer:- 2 Auditors should mitigate the risk associated with both very large and very small…

Q: Which of the following statements is incorrect? A. As the risk of material misstatement in the…

A: It is important for the Auditors to detect the material misstatement which are involved to the…

Q: Why is the audit team more concerned with controlling the exposure to the risk of overreliancethan…

A: Issuance of an unqualified record of financial statements due to the auditor's inability to correct…

Q: The risk of not detecting a misstatement resulting from fraud is greater than that resulting from…

A: Audit is the process of verifying books of accounts and financial statements of business and it…