Tut 342 - 4

ased on an assessment of audit risk, the auditors are concerned with the following two risks:   The risk that that the client might be making duplicate payments to vendors. The risk that the client’s accounting clerk might be making unauthorized payments to himself.   Required: a. Assuming that the client has a manual accounting system, describe how the auditors can design a test to identify the duplicate payments and unauthorized payments. b. Assuming that the client has an IT accounting system, describe how the auditors might use data analytic software to design a test to identify the duplicate payments and the unauthorized payments. b. Assuming that the client has an IT accounting system, describe how the auditors might use data analytic software to design a test to identify the duplicate payments and the unauthorized payments.

tch the type of risk with the related definition.A. Detection riskB. Control riskC. Inherent riskD. Audit risk___ 1. The probability that an auditor will give an inappropriate opinion on financial statements.___ 2. The probability that audit procedures will fail to produce evidence of material misstatements.___ 3. The probability that the client's internal control policies and procedures will fail to detect material misstatements if they have entered the accounting system.___ 4. The probability that material misstatements have occurred in transactions entering the accounting system.

Based on an assessment of audit risk, the auditors are concerned with the following two risks:   The risk that that the client might be making duplicate payments to vendors. The risk that the client’s accounting clerk might be making unauthorized payments to himself.   Required: a. Assuming that the client has a manual accounting system, describe how the auditors can design a test to identify the duplicate payments and unauthorized payments.       b. Assuming that the client has an IT accounting system, describe how the auditors might use data analytic software to design a test to identify the duplicate payments and the unauthorized payments.       c. Describe the advantages of using data analytics software to identify unusual transactions or entries.

In which of the following circumstances would an auditor expect to find that an entity had implemented automated controls to reduce risks of misstatement?a. When errors are difficult to predict.b. When misstatements are difficult to define.c. When large, unusual, or nonrecurring transactions require judgment.d. When transactions are high volume and recurring.

The internal audit can pinpoint the person responsible for carelessness. This will help to: Determine Liability Asset Protection Performance Appraisal Provide Suggestions Which one of the following is not true about internal auditors? üzul lis TOSHIBA

Which sentence below is true about audit risk:  A. Audit risk is the risk that a company may hire an incompetent auditor. B. Audit risk can be completely eliminated through appropriate sampling of transactions. C. Audit is what creates the demand for an audit. D. Audit risk is the risk that a "clean" opinion will be issued when, in reality, the financial statements are materially misstated..

What are the objectives of audit risk assessment, and why is it important in assessing the likelihood that fraud may occur? Explain why risk assessment performed during audit planning sets the tone for the entire audit engagement.

1. What is the primary reason that auditors’ assess internal control? a)To determine the risk of misstatements of accounts. b)To make recommendations for improvements in controls. c)To determine the nature of various accounts. d)To find misstatements in accounts.   2. Tests of controls are designed to determine all of the following, except: a)How consistent the control was applied. b)Whether or not the control was overridden. c)How a control was applied. d)By what means the control was applied.   3. All of the following are possible responses to a pervasive weakness in internal control except: a)Increase the size of a sample for certain tests in the engagement. b)Adding an element of unpredictability to the procedures performed. c)Increasing the level of supervision on the engagement. d)Assign more experienced personnel to the engagement.   4. Which of the following is not a COSO component of internal control? a)Board oversight. b)Control activities. c)Risk assessment. d)Control…

1. An auditor does not need to test the effectiveness of automated controls in a computerized system. true or false  2. The use of computer systems in financial reporting increases the risk of material misstatements.True orFalse

The audit risk model includes the four risks listed below. Match the type of risk with the related definition.A. Detection riskB. Control riskC. Inherent riskD. Audit risk___ 1. The probability that an auditor will give an inappropriate opinion on financial statements.___ 2. The probability that audit procedures will fail to produce evidence of material misstatements.___ 3. The probability that the client's internal control policies and procedures will fail to detect material misstatements if they have entered the accounting system.___ 4. The probability that material misstatements have occurred in transactions entering the accounting system.

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