Based on evidence gathered and evaluated, an auditor decides to increase the assessedlevel of control risk from that originally planned. To achieve an overall audit risklevel that is substantially the same as the planned audit risk level, the auditor could(1) decrease detection risk. (3) decrease substantive testing.(2) increase materiality levels. (4) increase inherent risk.

Q: Auditors have not been successful in measuring the components ofthe audit risk model. How is it…

A:

Q: Explain how decisions about when and how much substantive testing is performed relate to the overall…

A: The substantive testing is a method used by the audit staff to gather evidence about the…

Q: For each of the following, determine how the effectiveness of the entity's internal control affect…

A: a)  As the entity's internal control is more effective. Auditor would assess less level of material…

Q: In response to an increased level of assessed risk of material misstatement, an auditor of…

A: The auditor shall perform RAP i.e Risk Assessment Procedure that provides a reasonable assurance…

Q: The auditor attempts to correct for the risk of under-auditing (ineffectiveness) and over-auditing…

A: Auditing is the process of examining financial statements, records, and other financial information…

Q: The higher the level of confidence gained from control testing, the higher the level of assurance…

A: The level of assessment of risk of material misstatement depends on the auditor's level of…

Q: When performing audit procedures, the auditor is faced with an uncertainty of not detecting material…

A: Define sampling risk. Sampling risk is the risk that a sample statistic will differ from the true…

Q: Which of the following tests are considered further audit procedures that may be designed after…

A: Substantive test of details are considered further audit procedures that may be designed after…

Q: Discuss the differences between a first-party, second-party, and third-party audit.

A: The first-party audit is also known as internal audits. This is performed by internal audit…

Q: Which of the following increase control risk?

A: The answer for the multiple choice question and relevant explanation are presented hereunder : What…

Q: Ordinarily, risk assessment procedures do not involve the use of audit sampling. However, the…

A: The purpose of audit risk assessment is to gain a better understanding of Organisation and its…

Q: Which of the following regarding the level of materiality is correct? Select one: a. An increase in…

A: Materiality is a concept used in auditing to determine the significance or importance of an item or…

Q: If the tests of controls indicate certain controls are not as effective as the auditor originally…

A: Test of controls are performed  to determine the effectiveness of the control to detect and correct…

Q: (A) The requirement is to find the best statement concerning an auditor’s assessment of…

A: Control risk alludes to the probability that a large misrepresentation originating from a caused by…

Q: factor to be considered by an auditor while performing analytical procedures?

A: Option a is wrong because it is a correct statement. Auditor will procure an expected amounts or…

Q: An auditor’s preliminary control risk assessment is at a high level. Which of the following are…

A: Solution Explanation - The preliminary assessment of control risk is the process of evaluating the…

Q: Which of the following statements is NOT accurate as it relates to testing and the audit risk? O…

A: auditor shall test the audit risk and perform the risk assessment procedure in order to determine…

Q: Which is most likely when the assessed level of control risk increases? A) Change from performing…

A: The assessed level of control risk refers to the auditor's evaluation and judgment regarding the…

Q: As the risk of material misstatement increases, the amount of evidence the auditor will accumulate…

A: Risk of Material Misstatement: This implies a risk that the company's financial statements are…

Q: As the acceptable level of detection risk decreases, an auditor may change the a. Timing of…

A: Introduction:- Acceptable audit risk is the risk that the auditor is ready to take of giving an…

Q: Auditors have two strategies to choose from, the lower-assessed control risk strategy and the…

A: Incorrect (c)Auditors can always choose to use the predominantly substantive strategy regardless of…

Q: For a particular account balance assertion, the auditor is most likely to be able to avoid…

A: Auditors utilize tests of details to gather proof that the balances, disclosures, and underlying…

Q: state the effect on planned evidence (increase or decrease) of changing each of 'AN INCREASE IN…

A: Audit Risk Audit risk which describes as auditors furnish the inappropriate audit opinion whether…

Q: Which of the following is not compatible with a high level of inherent and control risk? detection…

A: The risk that the processes undertaken by the auditor to reduce audit risk to an acceptably low…

Q: A reliance strategy is chosen when the auditor: Multiple Choice Plans on conducting tests of…

A: The method used by auditors to depend on the work done by internal auditors or other independent…

Q: The risk that audit evidence for a segment will fail to detect misstatements exceeding tolerable…

A: Audit evidence refers to all sorts of information, or bunch of documents or any sort of data…

Q: Once the auditor detects a control deficiency, which of the following steps must he or shetake…

A: Internal control is the process of achieving objectives in operational efficiency and effectiveness.…

Q: In an environment that is highly automated, an auditor determines that it is not possible toreduce…

A:

Q: If control risk is assessed at the maximum, the auditor is required to obta knowledge about the:…

A: Lets understand the basics.Control risk is a risk which arise due to failing of control mechanism of…

Q: When the risk of material misstatement due to fraud is considered high in a particular area, which…

A: The risk of substantial misstatement due to fraud refers to the possibility of financial statements…

Q: Which of the following describes the circumstances that exist when an auditor assesses control risk…

A: Solution Concept Control risk means the risk that the internal controls that are required to prevent…

Q: uld consider whether A. the evidential matter obtained from the study of the internal control…

A: Internal control refers to the systematic approach of formulating policies, programs, rules in order…

Q: aterial misstatement exists when it does not exist     the risk that an auditor incorrectly…

A: Risk of incorrect rejection is defined as   the risk that the auditor concludes that a…

Q: Recall the definition of inherent risk. Why is it important for internal auditors to focus on…

A: The answer is given in the below step.

Q: Henrietta Lombardi assessed control risk to be low. What is the appropriate audit strategy she…

A: Correct option is C) combined Audit strategy

Q: Explain how analytical procedures are useful in: (1) The risk assessment stage of the audit. (2) The…

A: As per standards on auditing (SA) 520 “Analytical Procedures“, The term “analytical procedures” mean…

Q: Explain the circumstances when the auditor should revise the components of the audit risk model and…

A: The auditor should revise the parts of the audit risk model once the proof collected throughout the…

Q: The auditor is typically concerned with two major types of mistakes that materially impact the…

A: Option A) Risk of Assessing Control Risk Too Low/Risk of Incorrect Rejection is incorrect because…

Q: audit function: a) Risk assessment provides a framework for allocating limited resources to achieve…

A: Risk: It refers to the price paid for earning maximum returns. In business risk there is probability…

Q: Risk assessment most commonly focuses on two criteria - impact and likelihood. As an ganization's…

A: Risk assessment, in simple words, is to closely observe and examine the possible vulnerabilities…

Q: When an auditor decreases the planned assessed level of control risk because certain control…

A: Audit report represents the report prepared by an auditor that shows the opinion of the auditor on…