Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN: 9781337619455
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: Cengage Learning
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Question
Chapter 6, Problem 2RQSC
To determine
Introduction:
It is about the degree of risk involved in the prudence shown the auditor while ascertaining the sufficiency and appropriateness of audit evidence, which might result into material statement if prudence is not displayed. It also wants us to explain that if there is a high risk factor decision and low risk decision is to be taken, how sufficiency and appropriateness goes in contrast and the materiality aspect is changed.
To explain:
It is about the importance of sufficiency and appropriateness factor of auditevidence, which may result into material misstatement related with that client. It is also about the contrast factor of difference in sufficiency and appropriateness, if it is the case of a high risk decision or a low risk decision.
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Students have asked these similar questions
Which of the following would not result in exposure to nonsampling risk?a. Measuring the characteristic of interest in an inappropriate manner.b. Selecting items that are not representative of the population of interest.c. Making an unintentional mistake in measuring the characteristic of interest.d. All of the above would result in exposure to nonsampling risk.
True or false:
The lower the materiality level, the higher the amount of required evidence from substantive procedures to compensate for increased risk.
Which of the following statements is correct regarding detection risk and the audit risk model?
OA. The two components of detection risk are test of details risk and inherent risk.
B. Detection risk is equal to risk of material misstatement divided by audit risk.
OC. There is an inverse relationship between the risk of material misstatement and detection risk.
OD. There is a direct relationship between control risk and detection risk.
Chapter 6 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
Ch. 6 - Prob. 1CYBKCh. 6 - Prob. 2CYBKCh. 6 - Prob. 3CYBKCh. 6 - Which of the following statements is true...Ch. 6 - Prob. 5CYBKCh. 6 - Prob. 6CYBKCh. 6 - Prob. 7CYBKCh. 6 - Prob. 8CYBKCh. 6 - Prob. 9CYBKCh. 6 - Prob. 10CYBK
Ch. 6 - Prob. 11CYBKCh. 6 - Prob. 12CYBKCh. 6 - Prob. 13CYBKCh. 6 - Prob. 14CYBKCh. 6 - Prob. 15CYBKCh. 6 - Prob. 16CYBKCh. 6 - Prob. 17CYBKCh. 6 - Prob. 18CYBKCh. 6 - Prob. 19CYBKCh. 6 - Prob. 20CYBKCh. 6 - Prob. 1RQSCCh. 6 - Prob. 2RQSCCh. 6 - Prob. 3RQSCCh. 6 - Prob. 4RQSCCh. 6 - Refer to Exhibit 6.2 and describe the differences...Ch. 6 - Prob. 6RQSCCh. 6 - Prob. 7RQSCCh. 6 - Prob. 8RQSCCh. 6 - Prob. 10RQSCCh. 6 - Prob. 11RQSCCh. 6 - Prob. 12RQSCCh. 6 - Prob. 13RQSCCh. 6 - Prob. 14RQSCCh. 6 - Prob. 15RQSCCh. 6 - Indicate how the auditor could use substantive...Ch. 6 - Prob. 17RQSCCh. 6 - Prob. 18RQSCCh. 6 - Prob. 19RQSCCh. 6 - Prob. 20RQSCCh. 6 - Prob. 21RQSCCh. 6 - Prob. 22RQSCCh. 6 - Prob. 23RQSCCh. 6 - Prob. 24RQSCCh. 6 - Prob. 25RQSCCh. 6 - Prob. 26RQSCCh. 6 - Prob. 27RQSCCh. 6 - Prob. 28RQSCCh. 6 - Prob. 29FFCh. 6 - Prob. 30FFCh. 6 - Prob. 31FFCh. 6 - Prob. 32FFCh. 6 - Prob. 33FFCh. 6 - MINISCRIBE (LO 1, 2) As reported in the Wall...
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Similar questions
- Which of the following statements is true regarding the sufficiency of evidence needed to test an account? a. Evidence sufficiency is a measure of evidence quality. b. Evidence sufficiency is affected by the quality of evidence. c. A relationship does not exist between evidence sufficiency and evidence quality. d. For a specific client, evidence sufficiency will be the same across all accounts.arrow_forwardHow are the sufficiency and appropriateness of evidence related to detection risk?arrow_forwardThe lower the materiality level, the higher the amount of required evidence from substantive procedures to compensate for increased risk. Further audit procedures include risk assessment procedures, test of controls and substantive tests. Group of answer choices False, True True, False True, True False, Falsearrow_forward
- Which of the following does not increase the need for sufficient appropriate auditevidence?(1) A lower acceptable level of detection risk(2) An increase in the assessed control risk(3) A lower acceptable audit risk(4) A decrease in the assessed inherent riskarrow_forwardWhy are auditors more concerned with the risk of incorrect acceptance than the risk of incorrect rejection?arrow_forwardWhat is the relationship between Evidence and Detection Risk?arrow_forward
- Evidence that tends to make some fact in issue more or less likely than it would be without the evidence is called: A. Relevant evidence. B. Authenticated evidence. C. Direct evidence. D. Real evidence.arrow_forwardContrast the liability issues and disclosure of errors. Does disclosure minimize the risk? Does the disclosure improve avoidable events?arrow_forwardstate the effect on planned evidence (increase or decrease) of changing each of 'AN INCREASE IN ACCEPTABLE AUDIT RISK' factor, while the other factors remain unchanged.arrow_forward
- Which of the following presumptions is correct about the reliability of evidential matter? a. To be reliable, evidential matter should be convincing rather than persuasive. O b. Reliability of evidential matter refers to the amount of corroborative evidence obtained. O c. Effective internal control provides more assurance about the reliability of evidential matter. O d. Information obtained indirectly from outside sources is the most reliable evidential matter.arrow_forwardDoes the MM theory appear to be correct according to either empirical research or observations offirms’ actual behavior? How do assumptions affectyour conclusion about whether the MM theoryappears to be correct?arrow_forwardWhich of the following characteristics is not considered essential to audit evidence? a. Availability of evidence b. Reliability of evidence c. Sufficiency of evidence d. Relevance of evidencearrow_forward
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