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 8, Problem 21CYBK
To determine
Introduction: A Control deviation is used for evaluating the sample when auditor cannot perform appropriate alternative procedures for the items.
To Select: State whether the given condition is true or false.
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Students have asked these similar questions
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.
Why is the audit team more concerned with the risk of overreliance than with the risk of underreliance?
The risks of incorrect acceptance in variables sampling and of overreliance in attributessampling both relate toa. Effectiveness of an audit.b. Efficiency of an audit.c. Control risk assessment decisions.d. Evidence about assertions in financial statements.
Chapter 8 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
Ch. 8 - Prob. 1CYBKCh. 8 - Prob. 2CYBKCh. 8 - Prob. 3CYBKCh. 8 - Prob. 4CYBKCh. 8 - Prob. 5CYBKCh. 8 - Prob. 6CYBKCh. 8 - Prob. 7CYBKCh. 8 - Prob. 8CYBKCh. 8 - Prob. 9CYBKCh. 8 - Prob. 10CYBK
Ch. 8 - Prob. 11CYBKCh. 8 - Prob. 12CYBKCh. 8 - Prob. 13CYBKCh. 8 - Prob. 14CYBKCh. 8 - Prob. 15CYBKCh. 8 - Prob. 16CYBKCh. 8 - Prob. 17CYBKCh. 8 - Prob. 18CYBKCh. 8 - Refer to Exhibit 8.6. Assume a 5% risk of...Ch. 8 - Prob. 21CYBKCh. 8 - Prob. 22CYBKCh. 8 - Prob. 23CYBKCh. 8 - Prob. 24CYBKCh. 8 - Prob. 25CYBKCh. 8 - Prob. 26CYBKCh. 8 - Prob. 27CYBKCh. 8 - Prob. 28CYBKCh. 8 - Prob. 29CYBKCh. 8 - Prob. 30CYBKCh. 8 - Prob. 31CYBKCh. 8 - Prob. 32CYBKCh. 8 - Prob. 33CYBKCh. 8 - Prob. 34CYBKCh. 8 - Prob. 35CYBKCh. 8 - Prob. 36CYBKCh. 8 - Prob. 37CYBKCh. 8 - Prob. 38CYBKCh. 8 - Prob. 39CYBKCh. 8 - Prob. 1RQSCCh. 8 - Prob. 3RQSCCh. 8 - Prob. 4RQSCCh. 8 - Prob. 5RQSCCh. 8 - Prob. 6RQSCCh. 8 - Prob. 7RQSCCh. 8 - Prob. 8RQSCCh. 8 - Prob. 9RQSCCh. 8 - Prob. 10RQSCCh. 8 - Prob. 11RQSCCh. 8 - Prob. 12RQSCCh. 8 - Prob. 13RQSCCh. 8 - Prob. 14RQSCCh. 8 - Prob. 15RQSCCh. 8 - Prob. 16RQSCCh. 8 - Prob. 17RQSCCh. 8 - Prob. 18RQSCCh. 8 - Prob. 19RQSCCh. 8 - What is stratification? Distinguish between...Ch. 8 - Prob. 21RQSCCh. 8 - Prob. 22RQSCCh. 8 - Prob. 23RQSCCh. 8 - Prob. 24RQSCCh. 8 - Prob. 25RQSCCh. 8 - Prob. 26RQSCCh. 8 - Prob. 27RQSCCh. 8 - Prob. 28RQSCCh. 8 - Prob. 29RQSCCh. 8 - Prob. 30RQSCCh. 8 - Prob. 31RQSCCh. 8 - Prob. 32RQSCCh. 8 - Prob. 33RQSCCh. 8 - Prob. 36RQSCCh. 8 - Prob. 37RQSC
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Similar questions
- Which of the following risks does the auditor least control? a. inherent risk b. control risk c. detection risk d. all are equally controllablearrow_forwardWhich of the following is a correct? Select one: a. Planned detection risk and inherent risk have an inverse relationship. b. All of the above are correct relationships. c. Acceptable audit risk and planned detection risk have an inverse relationship. d. Control risk and planned detection risk have a direct relationship.arrow_forwardIf there is a detection of one control deviation, the auditor can do which of the following? a. Increase the sample size O b. Test a compensation control Oc. Amend the auditor's decision to rely on the control O d. All of the above are options for an auditor responding to detection of a control deviaticarrow_forward
- Tolerable error, is the maximum monetary error that the auditor is prepared to accept in the population and still conclude that audit objective has been achieved, is directly related to A.Sample size BAudit risk C.Materiality D.Expected errorarrow_forwardWhat responses should an auditor take based on different levels of acceptable detection risk (DR)? What type of tests should be performed?arrow_forwardThe maximum amount of error in a population that the auditor is willing to accept is referred to as the acceptable risk expected error tolerable error tolerable materialityarrow_forward
- The risk of incorrect rejection and the risk of underreliance relate to thea. Effectiveness of the audit.b. Efficiency of the audit.c. Preliminary estimates of performance materiality.d. Tolerable misstatement.arrow_forwardThe audit risk model consists of: AR = IR x R x DR. The detection risk is the dependent variable. What is the acceptable level ofdetection risk if the assessed level of inherent risk is HIGH and the control risk is MEDIUM? a. Higher b. Lower c. Lowest d. Mediumarrow_forwardWhat are the risks if the auditor concludes controls are operating effectively based on the sample and Control Risk is set too low?arrow_forward
- What does an auditor's assessment of Detection Risk determine?arrow_forwardthe reason why we use different materiality thresholds for different audits?arrow_forwardWhich 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_forward
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