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 9, Problem 24CYBK
To determine
Introduction:
Revenue cycle is a process or an activity of a company that starts from making of the goods or services and ends with receipt of cash for making sales of goods or services.
To select:
Choose the right answer among the given options that stands true with the given condition.
Expert Solution & Answer
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Check out a sample textbook solutionStudents have asked these similar questions
1. Please explain how to Evaluate the Data Reliability When Developing Expectations. The data an auditor will use to develop expectations in the acquisition and payment cycle has been deemed reliable by the audit staff.
2. Please Discuss the likely factors the audit team will consider when making this determination.
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
In performing a risk-based audit, when developing audit recommendations, the IT auditor should:
a) Use Computer Assisted Audit Techniques (CAATs) to test transactions.
b) Analyze the inherent risk, residual risk, and the cost of additional controls in relation to the potential for loss.
c) Determine if the risk is material based solely on auditor judgement.
d) Perform substantive procedures to eliminate control risk
Chapter 9 Solutions
Auditing: A Risk Based-Approach (MindTap Course List)
Ch. 9 - In the revenue cycle, the most significant...Ch. 9 - Which of the following statements is true...Ch. 9 - Prob. 4CYBKCh. 9 - Prob. 7CYBKCh. 9 - Prob. 8CYBKCh. 9 - Prob. 9CYBKCh. 9 - Prob. 10CYBKCh. 9 - Prob. 11CYBKCh. 9 - Prob. 12CYBKCh. 9 - Prob. 13CYBK
Ch. 9 - Prob. 14CYBKCh. 9 - Prob. 15CYBKCh. 9 - Prob. 16CYBKCh. 9 - Prob. 17CYBKCh. 9 - Prob. 18CYBKCh. 9 - Which of the following statements is false...Ch. 9 - Prob. 20CYBKCh. 9 - Prob. 22CYBKCh. 9 - Prob. 23CYBKCh. 9 - Prob. 24CYBKCh. 9 - Prob. 25CYBKCh. 9 - Prob. 26CYBKCh. 9 - Prob. 27CYBKCh. 9 - Prob. 28CYBKCh. 9 - Prob. 29CYBKCh. 9 - Prob. 30CYBKCh. 9 - Prob. 31CYBKCh. 9 - Prob. 32CYBKCh. 9 - Refer to Exhibit 9.1. Which accounts are relevant...Ch. 9 - Prob. 2RQSCCh. 9 - Prob. 3RQSCCh. 9 - An important task ¡n the audit of the revenue...Ch. 9 - Prob. 5RQSCCh. 9 - Prob. 6RQSCCh. 9 - Prob. 7RQSCCh. 9 - Prob. 8RQSCCh. 9 - Prob. 9RQSCCh. 9 - Prob. 10RQSCCh. 9 - Prob. 11RQSCCh. 9 - Prob. 12RQSCCh. 9 - Prob. 13RQSCCh. 9 - Prob. 14RQSCCh. 9 - Prob. 15RQSCCh. 9 - Stainless Steel Specialties (SSS) is a...Ch. 9 - Prob. 17RQSCCh. 9 - Prob. 18RQSCCh. 9 - Prob. 19RQSCCh. 9 - Prob. 20RQSCCh. 9 - Prob. 21RQSCCh. 9 - Prob. 22RQSCCh. 9 - Prob. 23RQSCCh. 9 - Prob. 24RQSCCh. 9 - Prob. 25RQSCCh. 9 - Prob. 26RQSCCh. 9 - Prob. 27RQSCCh. 9 - Prob. 28RQSCCh. 9 - Prob. 29RQSCCh. 9 - Prob. 30RQSCCh. 9 - Prob. 31RQSCCh. 9 - Prob. 32RQSCCh. 9 - Prob. 33RQSCCh. 9 - Prob. 34RQSCCh. 9 - Prob. 35RQSCCh. 9 - Prob. 36RQSCCh. 9 - Prob. 37RQSCCh. 9 - Prob. 38RQSCCh. 9 - Prob. 39RQSCCh. 9 - Read the following scenario about Strang...Ch. 9 - Prob. 41RQSCCh. 9 - Prob. 42RQSCCh. 9 - ZYNGA (LO Z 3, 4, 5, 6, 8) Refer to the Why It...Ch. 9 - UTSTARCOM, INC. (LO 2, 3, 4, 5, 6, 8) UTStarcom is...Ch. 9 - Prob. 47FFCh. 9 - Prob. 48FFCh. 9 - Prob. 55DAUA
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Similar questions
- Generally, which of the following audit procedures is the least expensive to perform? A. Analytical procedures B. Tests of details of balance C. Substantive tests of transactions D. Tests of controls E. Risk assessment proceduresarrow_forwardWhich of the following statements is correct concerning analytical procedures used in planning an audit engagement?a. They often replace the tests of controls that are performed to assess control risk.b. They typically use financial and nonfinancial data aggregated at a high level.c. They usually involve the comparison of assertions developed by management to ratios calculated by an auditor.d. They are often used to develop an auditor’s preliminary judgment about materiality.arrow_forwardGenerally, which of the following audit procedures is the least expensive to perform? A. Analytical procedures B. Tests of details of balance C. Substantive tests of transactions D. Tests of controls E. Risk assessment procedurearrow_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 interrelated. (AICPA, adapted)arrow_forwardAuditors need to identify audit risk in planning an audit engagement. In doing so, the audit risk model may be adopted. Require:Write the audit risk model in the two common ways it is often used by auditor. Each risk should be written in the model or named clearly for any abbreviations used.arrow_forwardYou have been asked by the audit manager to undertake preliminary analytical procedures.a) Identify the sources of information from which an auditor develops expectations.b) Describe the factors that influence an auditor’s consideration of the reliability of data for purposes of achieving audit objectives.arrow_forward
- 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.arrow_forward1. Explain the concepts of materiality and audit risk and the relationship between them? 2. Differentiate between the audit strategy and the audit plan. 3. Explain the term ‘analytical procedures’ and outline the different types of analytical procedures available to the auditor indicating situations in the audit when they can be used.arrow_forwardWhich of the following is most correct with respect to the use of analytical procedures? Analytical procedures may be used in evaluating balances in the testing O phase as long as the auditor also uses them in assessing the going concern assumption. Analytical procedures must be used throughout the audit. Analytical procedures are performed by studying plausible relationships between financial and nonfinancial data. Analytical procedures used in the testing phase of the audit are primarily O used that the auditor's understanding of the business is improved. direct an auditor's attention soarrow_forward
- Which of the following risk types increase when an auditor performs substantive analytical audit procedures for financial statement accounts at an interim date?a. Inherent.b. Control.c. Detection.d. Sampling.arrow_forwardIn obtaining audit evidence, the auditor should use professional judgment to assess the risk of material misstatement (which includes inherent and control risk) and design further audit procedures to ensure this risk is increased to an acceptably high level. TRUE OR FALSE? WHY?arrow_forward
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