Chapter 6 Homework Questions

docx

School

University of Illinois, Chicago *

*We aren’t endorsed by this school

Course

435

Subject

Accounting

Date

Apr 3, 2024

Type

docx

Pages

Uploaded by krzepka5

Name: Karolina Rzepka CHAPTER 6 HOMEWORK QUESTIONS 6-5 What are the major differences between a substantive strategy and a reliance strategy when the auditor considers internal control in planning an audit? With a substantive strategy the auditor’s decision not to rely on the entity’s controls and to audit the related financial statement accounts by relying more on substantive procedures. As for a reliance strategy the auditor intend to rely on the entity’s controls to reduce the risk of misstatement to an acceptably low level. The auditor may need more detailed understanding of internal control to develop a preliminary or “planned” assessment of control risk. 6-14 Internal control is a process designed to provide reasonable assurance regarding the achievement of which objective? a. Effectiveness and efficiency of operations. b. Reliability of financial reporting. c. Compliance with applicable laws and regulations. d. All of the above are correct. 6-16 After obtaining an understanding of an entity’s internal control system, an auditor may set control risk at high for some assertions because the auditor a. Believes the internal controls are unlikely to be effective. b. Determines that the pertinent internal control components are not well documented. c. Performs tests of controls to restrict detection risk to an acceptable level. d. Identifies internal controls that are likely to prevent material misstatements. 6-19 Which of the following audit techniques would most likely provide an auditor with the least assurance about the effectiveness of the operation of a control? a. Inquiry of entity personnel. b. Reperformance of the control by the auditor. c. Observation of entity personnel. d. Walkthrough. 6-21 SOC 1, Type 2 reports issued by the service organization’s auditor typically a. Provide reasonable assurance that their financial statements are free of material misstatements. b. Ensure that the entity will not have any misstatements in areas related to the service organization’s activities.

c. Ensure that the entity is billed correctly. d. Assess whether the service organization’s controls are suitably designed and operating effectively.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Related Documents

1000010507.jpg

Research Paprer 1 (1).docx

Explore the FASB Codification sections regarding public company financials.docx

a current issue or controversy related to revenue recognition for a for.docx

Discussion Thread_ Cost Concepts, Budgeting, and Control.docx

FINC 421 Week 2 Discussions.docx

Chapter 7 and Case 5.6 Homework Questions.docx

Chapter 9 Homework Questions.docx

16.05_ Hourly Exam 2 Fall 2015 VA.pdf

Audrey_Pickle_Ch 12 Assignment.docx

EXCEL TEMPLATES - Chapter 3.xlsx

Chapter 5 Auditing Homework.docx

Related Questions

Question 1 The evidence that is gathered by an auditor plays a crucial role in the results of the audit and the recommendations that are provided to management. When gathering evidence with regard to financial misstatements, the auditor is presented with 3 types of misstatements that could occur at financial statement and assertion level. You are required to discuss these misstatements.

Recommended textbooks for you

Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub