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 7, Problem 13RQSC
To determine
Introduction: It is about the risk assessment procedures for auditing the operations of a company.
To explain: The risk assessment procedures which an auditor has to perform for obtaining evidence regarding inherent risk in the operations of a company.
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Students have asked these similar questions
Risk assessment procedures are performed by auditors to:
a.
detect material misstatements in the financial statements.
b.
distribute the information needed to perform control activities.
c.
express an opinion on the financial statements.
d.
identify and assess the risks in achieving the entity’s objectives.
Provide the key factor auditors will have to review when deciding on the inherent risk within the accounting system.
When assessing the risk associated with an activity, an internal auditor should:
Provide assurance on the management of the risk.
Update the risk management process based on risk exposures.
Determine how the risk should best be managed.
Chapter 7 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
Ch. 7 - Prob. 1CYBKCh. 7 - Prob. 2CYBKCh. 7 - Prob. 3CYBKCh. 7 - Prob. 4CYBKCh. 7 - Prob. 5CYBKCh. 7 - Prob. 6CYBKCh. 7 - Prob. 7CYBKCh. 7 - Prob. 8CYBKCh. 7 - Prob. 9CYBKCh. 7 - Prob. 10CYBK
Ch. 7 - Prob. 11CYBKCh. 7 - Prob. 12CYBKCh. 7 - Prob. 1RQSCCh. 7 - Prob. 2RQSCCh. 7 - Prob. 3RQSCCh. 7 - Prob. 4RQSCCh. 7 - Prob. 7RQSCCh. 7 - Prob. 8RQSCCh. 7 - How does inherent risk relate to internal...Ch. 7 - Prob. 10RQSCCh. 7 - Prob. 11RQSCCh. 7 - Prob. 12RQSCCh. 7 - Prob. 13RQSCCh. 7 - Prob. 14RQSCCh. 7 - Prob. 15RQSCCh. 7 - Prob. 17RQSCCh. 7 - Prob. 18RQSCCh. 7 - Prob. 19RQSCCh. 7 - Prob. 22RQSCCh. 7 - Prob. 23RQSCCh. 7 - Prob. 24RQSCCh. 7 - Prob. 25RQSCCh. 7 - Prob. 26RQSCCh. 7 - Prob. 27RQSCCh. 7 - Prob. 29FF
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Similar questions
- what are business risks associated with an entity that an auditor should consider when performing an audit?arrow_forwardOutline the sources of audit evidence the auditor can use as part of risk assessment procedures.arrow_forwardList the functions needs to be done on the part of auditor to verify contingent liabilities of an company during the process of the audit?arrow_forward
- The most important objective of risk assessment procedures performed by auditor is a. To identify and assess financial risk in the activities of the entity b. To identify and assess the risk in achieving the entity objectives c. To detect material misstatements in the financial statements d. To detect errors and fraud occurred in the books of accountsarrow_forwardTo assess the risks of material misstatement with respect to Owners’ Equity Accounts, please identify the key tests of controls and substantive procedures, the auditors should consider.arrow_forwardWhich of the following is not an underlying principle related to risk assessment? OA. The organization should have clear objectives in order to be able to identify and assess the risks relating to the objectives. OB. The organization should monitor changes that could impact internal controls. OC. The organization should consider the potential for fraudulent behavior. OD. The auditors should determine how the company's risks should be managed.arrow_forward
- An auditor uses assessed control risk to(1) evaluate the effectiveness of the entity’s internal controls.(2) identify transactions and account balances where inherent risk is at the maximum.(3) indicate whether materiality thresholds for planning and evaluation purposesare sufficiently high.(4) determine the acceptable level of detection risk for financial statement assertionsarrow_forwardDefine risk of material misstatement. At what level of the financial statements do auditors measure RMM? Describe how auditors assess the RMM. What role does RMM play in substantive testing?arrow_forwardDefine materiality risk. How do auditors quantify RMM in financial statements? Describe the RMM audit process. So, what is RMM's function in real-worldarrow_forward
- 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 interrelatedarrow_forwardWhen performing a financial statement audit, auditors are required to explicitly assess the risk of material misstatement due to:Select one: a. Illegal acts. b. Fraud. c. Business risk. d. Errors.arrow_forwardDuring financial statement audit, auditors seek to restrict which type of risk? Control risk, Detection risk, Inherent risk, or Account riskarrow_forward
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