Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Question
Chapter 5, Problem 19TFQ
To determine
Introduction:Audit evidencerefers to various data or information collected by auditors while performing the audit. The audit evidence is the information that supports the conclusion made by the auditors on the financial statements of a company.
To state:Whether the given statement is true or false.
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During an audit, the internal auditor should consider the following factor(s) in determining the extent to which analytical procedures should be used:
a. Adequacy of the system of internal control.
b. Significance of the area being examined.
c. Precision with which the results of analytical audit procedures can be predicted.
d. All of the above.
Internal Control Audit Standards. Auditors are required to obtain a sufficient understanding of each component of a client’s internal control. This understanding is used toassess control risk and plan the audit of the client’s financial statements.Required:a. For what purposes should an auditors’ understanding of the internal control componentsbe used in planning an audit?b. What is required for an audit team to assess control risk below the maximum level?c. What should an audit team consider when seeking to reduce the planned assessed level ofcontrol risk below the maximum?d. What are the documentation requirements concerning a client’s internal control components and the assessed level of control risk?
The auditor obtains sufficient understanding of the internal control structure to identify reportable conditions.
True or false? why?
Chapter 5 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 5 - Prob. 1TFQCh. 5 - Prob. 2TFQCh. 5 - Prob. 3TFQCh. 5 - Prob. 4TFQCh. 5 - Prob. 5TFQCh. 5 - Prob. 6TFQCh. 5 - Prob. 7TFQCh. 5 - Prob. 8TFQCh. 5 - Prob. 9TFQCh. 5 - Prob. 10TFQ
Ch. 5 - Prob. 11TFQCh. 5 - Prob. 12TFQCh. 5 - Prob. 13TFQCh. 5 - Prob. 14TFQCh. 5 - Prob. 15TFQCh. 5 - Prob. 16TFQCh. 5 - Prob. 17TFQCh. 5 - Prob. 18TFQCh. 5 - Prob. 19TFQCh. 5 - Prob. 20TFQCh. 5 - Prob. 21TFQCh. 5 - Prob. 22TFQCh. 5 - Prob. 23TFQCh. 5 - Prob. 24TFQCh. 5 - Prob. 25MCQCh. 5 - Prob. 26MCQCh. 5 - Prob. 27MCQCh. 5 - Prob. 28MCQCh. 5 - Prob. 29MCQCh. 5 - Prob. 30MCQCh. 5 - Prob. 31MCQCh. 5 - Which of the following accounts would not be...Ch. 5 - Prob. 33MCQCh. 5 - Which management assertion addresses whether the...Ch. 5 - Prob. 35MCQCh. 5 - Prob. 36MCQCh. 5 - Prob. 37MCQCh. 5 - Prob. 38MCQCh. 5 - Prob. 39MCQCh. 5 - Prob. 40MCQCh. 5 - Prob. 41MCQCh. 5 - Prob. 42MCQCh. 5 - Prob. 43MCQCh. 5 - Prob. 44MCQCh. 5 - Prob. 45MCQCh. 5 - Prob. 46MCQCh. 5 - Prob. 47MCQCh. 5 - Prob. 48MCQCh. 5 - Prob. 49RSCQCh. 5 - Prob. 50RSCQCh. 5 - Ray, the owner of a small company, asked Holmes,...Ch. 5 - Prob. 52RSCQCh. 5 - Prob. 53RSCQCh. 5 - Prob. 54RSCQCh. 5 - Professional guidance indicates that the auditor...Ch. 5 - Prob. 56RSCQCh. 5 - Assume that an organization asserts that it has...Ch. 5 - Prob. 58RSCQCh. 5 - Prob. 59RSCQCh. 5 - Prob. 60RSCQCh. 5 - Prob. 61RSCQCh. 5 - Prob. 62RSCQCh. 5 - Prob. 63RSCQCh. 5 - Prob. 64RSCQCh. 5 - Prob. 65RSCQCh. 5 - Prob. 66RSCQCh. 5 - Prob. 67RSCQCh. 5 - Prob. 68RSCQCh. 5 - Prob. 69RSCQCh. 5 - Prob. 70RSCQCh. 5 - Prob. 71RSCQCh. 5 - Prob. 72RSCQCh. 5 - Prob. 73RSCQCh. 5 - Prob. 74RSCQCh. 5 - Prob. 75RSCQCh. 5 - Prob. 76RSCQCh. 5 - Prob. 77RSCQCh. 5 - Prob. 79RSCQCh. 5 - Prob. 80RSCQCh. 5 - Prob. 81RSCQCh. 5 - Prob. 82RSCQCh. 5 - Prob. 83RSCQCh. 5 - Prob. 84RSCQCh. 5 - Prob. 85RSCQCh. 5 - Prob. 86RSCQCh. 5 - Prob. 87RSCQCh. 5 - Prob. 89RSCQCh. 5 - Prob. 90FFCh. 5 - Prob. 91FF
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Similar questions
- Which of the following is least likely to be a continuous activity that an auditor would be expected to perform throughout an audit engagement? OA. Understanding the entity and its environment OB. Assessing the risk of material misstatement OC. Considering client continuance OD. Inquiring as to the design of controlsarrow_forwardAuditors are required to obtain a sufficient understanding of each component of a client’s internal control. This understanding is used toassess control risk and plan the audit of the client’s financial statements.Required:a. For what purposes should an auditors’ understanding of the internal control components be used in planning an audit?b. What is required for an audit team to assess control risk below the maximum level?c. What should an audit team consider when seeking to reduce the planned assessed level of control risk below the maximum?d. What are the documentation requirements concerning a client’s internal control components and the assessed level of control risk?arrow_forwardWhich of the following audit techniques ordinarily would provide an auditor with the least assurance about the operating effectiveness of an internal control activity? a. Inquiry of client personnel. b. Inspection of documents and reports. c. Observation of client personnel. d. Preparation of system flowcharts.arrow_forward
- The auditor’s risk assessment procedures should always include the following, except a. Inquiries of management and of others within the entity b. Analytical procedures c. Observation and inspection d. Substantive test procedures and tests of controlarrow_forwardWhen testing a control activity’s operating effectiveness, procedures the auditor performs totest operating effectiveness would likely includea. Inquiry of appropriate personnel.b. Reading over the company’s code of conduct.c. Reperformance of the control activity.d. Both a and c are correct.arrow_forwardexplain .After documenting internal control in an audit engagement, the auditor may perform tests on Those controls that the auditor plans to rely on. Those controls in which deficiencies were identified. Those controls that have a material effect on the financial statement balances. A random sample of the controls that were reviewed.arrow_forward
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