Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Question
Chapter 9, Problem 2RQ
To determine
Explain the reason why the auditor should consider the risk of material misstatement at the overall financial statement level.
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Students have asked these similar questions
Define the danger of substantial misrepresentation. RMM is measured by auditors at what level of the financial statements? Explain how auditors evaluate the RMM. What part of substantive testing does RMM play?
Define and give examples of off-balance-sheet information. Why should auditors be concerned with such items?
The risk of a material misstatement in the financial statements arising due to error or omission as a result of factors other than the failure of controls is called:
a.
Control Risk
b.
Inherent Risk
c.
Audit Risk
d.
Detection Risk
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
- Define 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_forwardDuring financial statement audit, auditors seek to restrict which type of risk? Control risk, Detection risk, Inherent risk, or Account riskarrow_forwardIn a financial statement audit, inherent risk represents a. The risk that misstatements could occur and not be detected by the auditor's procedures. b. The risk that misstatements could occur and not be prevented or detected by the system of internal control. c. The risk that the auditor fails to modify materially misstated financial statements. d. The susceptibility of an account balance to misstatement that could be material.arrow_forward
- When 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_forwardThe risk that the auditors will conclude, based on substantive procedures, that a material misstatement does not exist in an account balance when, in fact,arrow_forwardWhat is tolerable misstatement? How do auditors use it when deciding whether account balancesare fairly recorded?arrow_forward
- How does the concept of materiality influence the auditors’ report?arrow_forwardWhich is not a Risk Assessment Procedure? a. Ratio Analysis b. Observation of Activities c. Account Receivable confirmations d. Inspection of Documents e. Inquiry of Internal Auditorsarrow_forwardWhat factors should the auditor take into consideration before concluding that a financial statement do not show a True and Fair View?arrow_forward
- Which of the following factors do NOT impact the auditor's decision on the mix of substantive procedures to be performed? O overall risk assessment for the client O nature of the account balance O management's opinion on the risk of the account balance O risk assessment for the specific account balancearrow_forwardWhat steps should auditors take if during a compilation engagement they become aware that the financial statements are misleading?arrow_forwardThe risk that a client's financial statements are susceptible to material misstatements is a. control risk b. inherent risk c. audit risk d. none of the abovearrow_forward
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