Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 19, Problem 8RQ
To determine
Discuss the reason for the audit of prepaid insurance should ordinarily take a relatively small amount of audit time if the client assessed control risk for acquisition is low.
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Students have asked these similar questions
In the framework of audit and assurance, we are investigating the consequences of expectation gaps for fraud.
Which of the following is appropriate about risk assessment?
A. The assessed level of inherent and control risk can be sufficiently low, thus resulting to eliminating the need for substantive tests.
B. Audit risk may be more effectively determined by assessing inherent and control risk separately.
C. Detection risk is eliminated if an auditor were to examine 100 percent off the account balance or class of transactions.
D. There is an iverse relationship between detection risk and the combined level of inherent and control risk
What does an auditor's assessment of Detection Risk determine?
Chapter 19 Solutions
Auditing And Assurance Services
Ch. 19 - Identify three asset accounts, three expense...Ch. 19 - Explain the relationship between substantive tests...Ch. 19 - Prob. 3RQCh. 19 - Prob. 4RQCh. 19 - Prob. 5RQCh. 19 - Prob. 6RQCh. 19 - Prob. 7RQCh. 19 - Prob. 8RQCh. 19 - Prob. 9RQCh. 19 - Prob. 10RQ
Ch. 19 - Which documents will be used to verify accrued...Ch. 19 - Prob. 12RQCh. 19 - Prob. 13RQCh. 19 - Prob. 14RQCh. 19 - Prob. 15.1MCQCh. 19 - Prob. 15.2MCQCh. 19 - Prob. 15.3MCQCh. 19 - Prob. 16.1MCQCh. 19 - Prob. 16.2MCQCh. 19 - Prob. 16.3MCQCh. 19 - Prob. 17.1MCQCh. 19 - Prob. 17.2MCQCh. 19 - Prob. 17.3MCQCh. 19 - Prob. 18.1MCQCh. 19 - Prob. 18.2MCQCh. 19 - Prob. 18.3MCQCh. 19 - Prob. 19DQPCh. 19 - Prob. 20DQPCh. 19 - Prob. 21DQPCh. 19 - Prob. 22DQPCh. 19 - Prob. 24DQPCh. 19 - Prob. 25DQPCh. 19 - You are auditing the financial statements of...Ch. 19 - Prob. 27DQPCh. 19 - Prob. 28DQPCh. 19 - Prob. 29DQP
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Explain why auditing is important in lowering the risk associated with information.arrow_forwardGenerally, which of the following audit procedures is the least expensive to perform? A. Analytical procedures B. Tests of details of balance C. Substantive tests of transactions D. Tests of controls E. Risk assessment proceduresarrow_forwardSome account balances such as those for pensions and leases are the result of complex calculations. The susceptibility to material misstatements in these types of accounts is defined as a. Sampling risk b. Detection risk c. Inherent risk. d. audit riskarrow_forward
- Examining the implications of expectation gaps in the context of audit and assurance on fraudarrow_forwardGenerally, which of the following audit procedures is the least expensive to perform? A. Analytical procedures B. Tests of details of balance C. Substantive tests of transactions D. Tests of controls E. Risk assessment procedurearrow_forwardDistinguish between the evaluation of the adequacy of insurancecoverage and the verification of prepaid insurance. Explain which is more important ina typical auditarrow_forward
- How is the audit risk model used to plan the audit?arrow_forwardAssuming a lack of internal control in a client's system, the risk of material misstatement is known as? O Inherent risk Client risk O Detection risk O Audit riskarrow_forwardYour audit client is under intense pressure to meet an earnings target. Which transaction assertion for purchases is most at risk. Occurrence Accuracy Completeness Classificationarrow_forward
- Are internal controls required even if an auditor doesn't plan to rely on them in his audit? Explain.arrow_forwardWhen would an auditor prefer to conduct a black-box audit? What about a white-box audit?arrow_forwardWhich of the following terms best describes the risk that audit procedures will fail to detect material misstatements? a. Control risk. b. Inherent risk. c. Detection risk. d. Audit risk.arrow_forward
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