Examine the information enunciated below carefully and identify the impact of increase in the assessed risk of material misstatement on timeliness of direction on review of audit work. a. Increase in the timeliness of direction and more detailed review of work b. None of the options c. Decrease in the timeliness of direction and more detailed review of work d. Neither increase nor decrease in the timeliness of direction and more detailed review of work

Examine the information enunciated below carefully and identify the impact of increase in the assessed risk of material misstatement on timeliness of direction on review of audit work. a. Increase in the timeliness of direction and more detailed review of work b. None of the options c. Decrease in the timeliness of direction and more detailed review of work d. Neither increase nor decrease in the timeliness of direction and more detailed review of work

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

When an auditor decreases the planned assessed level of control risk because certain control procedures were determined to be more effective than anticipated, the auditor would most likely increase the: a. Extent of tests of details. b. Level of inherent risk. c. Extent of tests of controls. d. Level of detection risk.
Explain the conditions that require a departure from an unqualified audit report.
STATEMENT 1: Significant unexpected fluctuations identified by analytical review procedures will usually necessitate a review of internal control. STATEMENT 2: Working papers should generally contain the nature and extent of audit procedures done, the results of any testing, and the CPA's conclusion about how the findings will affect his report. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correct
When an audior increases the assessed level of control risk because certain control activities were determined to be ineffective, the auditor would most likely increase the: A. extent of tests of control B. level of detection risk C. extent of tests of detail D. Level of inherent risk
As the acceptable level of detection risk increases, an auditor may: Oa. Lower the assessed level of inherent risk. O b. Eliminate the assessed level of control risk from consideration as a planning factor. O c. Change the planned timing of substantive tests from year-end to interim. Od. Increase the risk of material misstatement.
When auditing estimates, auditors will propose adjusting entries for differences in judgment. Question options: True False
When Arthus Andersen audited Enron, they should have recognized an acceptable level of detection risk is inversely related to the: a. Assurance provided by substantive testing b. Risk of misappliction of audit procedure c. Preliminary judgement bout lateriality levels d. Risk of failing to discover material misstatements.
Which of the following recognizes that an audit conducted under generally accepted auditing standards may not detect all material misstatements?a. Absolute assurance.b. Professional judgment.c. Reliability of audit evidence.d. Reasonable assurance.
The tolerable rate of deviation set by the auditor for tests of controls depends primarily on which of the following? a. The planned risk of assessing control risk too low. b. The dollar amount of substantive misstatements. c. The anticipated cause of the errors. d. The tolerable rate used in audits of other clients in the same industry.
If the sample evidence does not support the planned level of control risk, the audit team coulda. Increase the assessed level of control risk.b. Perform additional substantive procedures, reducing the necessary level of detection risk.c. Expand the sample to achieve an observed ULRD less than the tolerable rate of deviation.d. All of the above are acceptable.
If there is a detection of one control deviation, the auditor can do which of the following? a. Increase the sample size O b. Test a compensation control Oc. Amend the auditor's decision to rely on the control O d. All of the above are options for an auditor responding to detection of a control deviatic