Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 9, Problem 28.1MCQ
To determine
Identify the correct answer for the given statement.
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To allocate the preliminary estimate of materiality to the accounts, the auditor might consider
A. The relative variability of the accounts.
B.The size, in absolute terms, of each account.
C.Using the audit risk equation to calculate the amount of materiality to each account.
D.Adjusting detection risk for each account to arrive at consistent materiality amounts across accounts.
Which analytical procedures are most important in verifyingnotes payable? Which types of misstatements can the auditor uncover by the use ofthese tests?
Which of the following are reasons that auditors conduct analytical procedures at the risk assessment
phase of the audit? Select all that apply.
O assist with the identification of risk
assess if the financial statements reflect the auditor's knowledge of their client
O identify accounts at risk of material misstatement
O highlight unusual fluctuations in accounts
O helps with the calculation of materiality
Chapter 9 Solutions
Auditing And Assurance Services
Ch. 9 - Prob. 1RQCh. 9 - Prob. 2RQCh. 9 - Provide two examples of factors that might...Ch. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 7RQCh. 9 - Prob. 8RQCh. 9 - Prob. 9RQCh. 9 - Prob. 10RQ
Ch. 9 - Prob. 11RQCh. 9 - Prob. 12RQCh. 9 - Prob. 13RQCh. 9 - Prob. 14RQCh. 9 - Prob. 15RQCh. 9 - Prob. 16RQCh. 9 - Prob. 17RQCh. 9 - Prob. 18RQCh. 9 - Prob. 19RQCh. 9 - Prob. 20RQCh. 9 - Prob. 21RQCh. 9 - Prob. 22RQCh. 9 - Prob. 23RQCh. 9 - Prob. 24RQCh. 9 - Prob. 25.1MCQCh. 9 - Prob. 25.2MCQCh. 9 - Prob. 25.3MCQCh. 9 - Prob. 26.1MCQCh. 9 - Prob. 26.2MCQCh. 9 - Prob. 26.3MCQCh. 9 - Prob. 27.1MCQCh. 9 - Prob. 27.2MCQCh. 9 - Prob. 27.3MCQCh. 9 - Prob. 28.1MCQCh. 9 - Prob. 28.2MCQCh. 9 - Prob. 28.3MCQCh. 9 - Prob. 29DQPCh. 9 - Prob. 30DQPCh. 9 - Prob. 31DQPCh. 9 - Prob. 33DQPCh. 9 - Prob. 34DQPCh. 9 - Prob. 35DQPCh. 9 - Prob. 36DQPCh. 9 - Prob. 37DQPCh. 9 - Prob. 39C
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Similar questions
- Which of the following is consistent with an assessed level of control risk at below the maximum level after completing the auditors consideration of the client's internal control over receivables? * a. Increased materiality level in selecting receivables to be confirmed and use a positive confirmation letter. b. Increased materiality level in selecting receivables to be confirmed and use a negative confirmation letter. c. Decrease materiality level in selecting receivables to be confirmed and use a negative confirmation letter. d. Decrease materiality level in selecting receivables to be confirmed and use a positive confirmation letter. e. None of the abovearrow_forwardWhat is the primary objective of the fraud brainstorming session?a. Determine audit risk and materiality.b. Identify whether analytical procedures should be applied to the revenue accounts.c. Assess the potential for material misstatement due to fraud.d. Determine whether the planned procedures in the audit plan will satisfy the general audit objectives.arrow_forwardSelect from the following the main object of an audit. a. Expression of expert opinion b. Detection and Prevention of fraud and error c. Preparation of financial statements d. Examination of books of accountsarrow_forward
- Which of the following is consistent with an assessed level of control risk at below the maximum level after completing the auditors consideration of the client’s internal control over receivables? Increased materiality level in selecting receivables to be confirmed and use a positive confirmation letter. Increased materiality level in selecting receivables to be confirmed and use a negative confirmation letter. Decrease materiality level in selecting receivables to be confirmed and use a negative confirmation letter. d. Decrease materiality level in selecting receivables to be confirmed and use a positive confirmation letter.arrow_forwardWhen making a decision about the dollar amount in an account balance based on a sample, the audit team considers the risk of incorrect acceptance to be more serious than the risk of incorrect rejection becausea. The incorrect rejection decision impairs the efficiency of the audit.b. The audit team will do additional work and discover the misstatement of the incorrect decision.c. The incorrect acceptance decision impairs the effectiveness of the audit.d. Sufficient appropriate audit evidence will not have been obtained.arrow_forwardthe auditor is planning to use accounts payable confirmations when auditing the client's accounts payable. The use of accounts payable confirmations will test which of the following assertions? a. rights and obligations b. existence (only) c. existence and completeness d. cutoffarrow_forward
- For which of the following audit tests would an auditor most likely use attribute sampling? Making an independent estimate of the amount of FIFO Inventory. Examining invoices in support of the valuation of fixed asset additions. Selecting accounts receivable for confirmation of account balances Inspecting employee time cards for proper approval by supervisors.arrow_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_forwardWhich 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_forward
- For which of the following tests would an auditor most likely use attribute sampling?(1) Selecting accounts receivable for confirmation of account balances.(2) Inspecting employee time cards for proper approval by supervisors.(3) Making an independent estimate of the amount of a LIFO inventory.(4) Examining invoices in support of the valuation of fixed asset additions.arrow_forwardWhich of the following tests are considered further audit procedures that may be designed after assesssing the risk of material misstatements? 1. Substantive test of details 2. Risk assessment proceduresarrow_forwardSubject: Auditing & Assurance PrinciplesWhen performing audit procedures, the auditor is faced with an uncertainty of not detecting material errors in an account balance or class of transactions. This uncertainty arises because of sampling and non-sampling risks.a) Define sampling risk.b) Define non-sampling risk.c) How could the auditors control each type of risk?arrow_forward
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