Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 9, Problem 33DQP
To determine
Explain the meaning of acceptable audit risk and state whether the given statement is true or false.
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Describe what is meant by acceptable audit risk. Explain whyeach of the following statements is true:a. A CPA firm should attempt to achieve the same audit risk for all audit clients whencircumstances are similar.b. A CPA firm should decrease acceptable audit risk for audit clients when external usersrely heavily on the statements.c. A CPA firm should decrease acceptable audit risk for audit clients when engagementrisk is high.d. Different CPA firms should attempt to achieve reasonably similar audit risks forclients with similar circumstances
Which of the following best describes the relationship between auditing and attestationengagements?a. Auditing is a subset of attestation engagements that focuses on the certification of financial statements.b. Attestation is a subset of auditing that provides lower assurance than that provided by anaudit engagement.c. Auditing is a subset of attestation engagements that focuses on providing clients withadvice and decision support.d. Attestation is a subset of auditing that improves the quality of information or its contextfor decision makers
What is the relationship between the external auditor and the organization. What steps have been taken to ensure that the relationship is truly neutral and no bias is shown by the external auditing firm?
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 best describes the relationship between auditing and attestation engagements Select one: a. Auditing is a subset of attestation engagements that focuses on providing clients with advice and decision support. b. Attestation is a subset of auditing that provides lower assurance than that provided by an audit engagement. c. Auditing is a subset of attestation engagements that focuses on the certification of financial statements. d. Attestation is a subset of auditing that improves the quality of information or its context for decision makersarrow_forwardAn assurance service is defined as a service thata. Provides auditing services to nonfinancial information.b. Reviews unaudited financial information.c. Improves the quality of information for decision makers.d. Reduces the risk in management decision making.arrow_forwardWhich of the following statements is incorrect? Select one : a. Internal auditors provide assurance on the organization's governance , risk management and internal control processes . b. Communicating engagement outcomes is a critical component of all internal assurance and consulting engagements . c. Obtaining an a detailed understanding of the auditee is an important performing step. d. Independence refers to the organizational status of the Internal Audit function , whereas objectivity refers to the attitude of individual internal auditors .arrow_forward
- 1. Why is audit firm culture important in ensuring that individual audit engagement partners resolve adjustments in a quality manner? 2. Why should the auditor ordinarily disclaim an opinion if the client imposes significant scope limitations on the audit procedures?arrow_forwardAssume your firm has decided to move forward. Referring to your evaluation of internal and external factors. explain why it would be appropriate for the external audit team to accept the client audit request. using examples to support your responsearrow_forwardCritically evaluate how the breach of ethics by auditors could contribute to expand the audit expectation gap. Your report should include/address the following concerns: 1. Introduce/analyze ethical aspect of auditors and audit expectation gap. 2. Critically examine how different threats to ethics enlarge the audit expectation gap. 3. Propose ways to minimize the threats to ethics and thus the expectation gap of audits. 4. Determine the current developments and future direction of ethical aspects of auditors, and explain how such developments contribute to safeguard the audit profession as a concluding remarks. Include a cover page, an executive summary, a table of contents and references. You may include an appendix if necessary.arrow_forward
- Audit evidence is more persuasive when : A_Information is provided by the board of directors of the company B_ The audit team comprises of high quality personnel C_ Audit evidence is inconsistent with that from another D_ Items of evidence from different sources or of a different nature are consistentarrow_forwardWhich of the following BEST (select one) describes why risk assessment can be viewed as the foundation of the audit function: a) Risk assessment provides a framework for allocating limited resources to achieve maximum benefits and value derived from the audit process. b) Risk assessment enables flexibility in approaching audits and the performance of control testing. c) Risk assessment enables an orderly approach to conducting audits. d) Rsk assessment provides for a measurement criteria to evaluate audit results and communicate to management.arrow_forwardYou are required to read the following statement carefully, and then, discuss the factors behind the statement content, stating examples of how this content can be implemented: "Auditors develop overall audit plans to ensure that they obtain sufficient appropriate audit evidence. The timing and extent of audit procedures auditors use is a matter of professional judgement, which depends upon a number of factors". Plz don’t make it long answerarrow_forward
- Which of the following actions would be considered as self-interest threats? Select which two options are correct. Select one or more: A. A member of the assurance team is a director of the client. B. An auditor acts as an advocate on behalf of an assurance client. C. An auditor has potential employment with an assurance client. D. One client provides a high percentage of total audit fees.arrow_forwardIdentify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements in providing your response: Reasonable assurance • Planning and supervision • Materiality ⚫ Risk assessment • Audit evidence a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. b. Obtaining an understanding of the client's business and industry. c. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. d. Obtaining confirmations from the client's customers as to the ending balances in accounts receivable. e. Preparing a written audit plan. f. Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. g. Considering the likelihood that the account balance contains a material…arrow_forwardLarger firms should carefully consider their competence to take on an audit client in aspecialized industry if they have not previously worked with an audit client in the sameindustry. True or False?arrow_forward
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