While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly. To select: The most directly illustrated component of audit risk with respect to the given illustration.

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Chapter 4, Problem 4.27P

To determine

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly.

To select:The most directly illustrated component of audit risk with respect to the given illustration.

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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

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. (AICPA, adapted)

its components. The firm of Pack & Peck evaluates the risk of material isstate- -1,4-2, 4-3 4-27 When planning a financial statement audit, a CPA must understand au sk its components. The firm of Pack & Peck evaluates the risk of materiai ment (RMM) by disaggregating RMM into its two components: inherentisk and control risk. Required: For each illustration, select the component of audit risk that is most directly illus- trated. The components of audit risk may be used once, more than once, or not at all Components of Audit Risk: a. Control risk b. Detection risk c. Inherent risk Component of Audit Risk Illustration 1. A client fails to discover employee fraud on a timely basis because bank accounts are not reconciled monthly. 2. Cash is more susceptible to theft than an inventory of coal. 3. Confirmation of receivables by an auditor fails to detect a material misstatement. 4. Disbursements have occurred without proper approval. 5. There is inadequate segregation of duties. 6. A…

Answer 2

Question

Chapter 4, Problem 4.27P

To determine

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly.

To select:The most directly illustrated component of audit risk with respect to the given illustration.

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Answer 3

Question

Chapter 4, Problem 4.27P

To determine

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly.

To select:The most directly illustrated component of audit risk with respect to the given illustration.

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Answer 4

Question

Chapter 4, Problem 4.27P

To determine

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly.

To select:The most directly illustrated component of audit risk with respect to the given illustration.

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Answer 5

Chapter 4, Problem 4.27P

To determine

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly.

To select:The most directly illustrated component of audit risk with respect to the given illustration.

Answer 6

Chapter 4, Problem 4.27P

To determine

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly.

To select:The most directly illustrated component of audit risk with respect to the given illustration.

Answer 7

Chapter 4, Problem 4.27P

To determine

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly.

To select:The most directly illustrated component of audit risk with respect to the given illustration.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 4 - Prob. 4.1RQ Ch. 4 - Prob. 4.2RQ Ch. 4 - Prob. 4.3RQ Ch. 4 - Prob. 4.4RQ Ch. 4 - Prob. 4.5RQ Ch. 4 - Prob. 4.6RQ Ch. 4 - Prob. 4.7RQ Ch. 4 - Prob. 4.8RQ Ch. 4 - Prob. 4.9RQ Ch. 4 - Prob. 4.10RQ

While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly. To select: The most directly illustrated component of audit risk with respect to the given illustration.

Solution Summary: The author explains that audit risk and audit components must be understood by the auditor to plan the necessary audit procedures accordingly.

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly.

To select:The most directly illustrated component of audit risk with respect to the given illustration.

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Chapter 4 Solutions

While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly. To select: The most directly illustrated component of audit risk with respect to the given illustration.

Solution Summary: The author explains that audit risk and audit components must be understood by the auditor to plan the necessary audit procedures accordingly.

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly. To select:The most directly illustrated component of audit risk with respect to the given illustration.

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Chapter 4 Solutions

Introduction: While planning a financial statement audit, audit risk and audit components must be understood by the auditor so that he can plan all the necessary audit procedures accordingly.

To select:The most directly illustrated component of audit risk with respect to the given illustration.