Answered: Financial audit Q&A What risks that may…

Financial audit Q&A What risks that may occur during assertion testing, but cannot be prevented due to the lack of time?

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter14: Completing A Quality Audit

Section: Chapter Questions

Problem 18CYBK

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For a particular account balance assertion, the auditor is most likely to be able to avoid substantive test of details with which of these sets of risk assessments? Results of analytical procedures Unexpected Expected Expected Unexpected Inherent Maximum Maximum A. B. C. Low D. Low a. A. b. B. c. C. d. D. Control Maximum Maximum Low Low
Auditing Question 3 A. Discuss the audit expectation gap. Your answer should include the following: the main causes of the expectation gap; its main components; and procedures that can be taken to reduce the expectation gap.
How does assurance mapping differ from traditional audit planning? a) Comprehensive risk coverage guides verification strategies b) Random checks provide better results c) Standard plans work everywhere d) Coverage gaps don't matter
3.Residual risks are not: Group of answer choices Unaddressed risks Unmanaged risks Mitigated risks None of the choices Net risks 4. Recommendations should be included in final audit communications to: Group of answer choices Ensure that problems are resolved in the manner suggested by the auditor Provide management with options for addressing audit observations Minimize the amount of time required to correct audit observations Guarantee that audit observations are addressed, regardless of cost
Which is not a Risk Assessment Procedure? a. Ratio Analysis b. Observation of Activities c. Account Receivable confirmations d. Inspection of Documents e. Inquiry of Internal Auditors
Which must the auditor communicate to management? A. B. C. D. Known Material Weaknesses Yes Yes No No Known Significant Deficiencies Yes No Yes No
(Audit) What is Materiality?
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.
Which of the following does NOT describe substantive procedures? O includes inspection, inquiry, and confirmation O also known as substantive testing or tests of details O influenced by the overall risk assessment O designed to obtain indirect evidence of information included in the financial statements
The risk that a client's financial statements are susceptible to material misstatements is a. control risk b. inherent risk c. audit risk d. none of the above
The risks of incorrect acceptance in variables sampling and of overreliance in attributessampling both relate toa. Effectiveness of an audit.b. Efficiency of an audit.c. Control risk assessment decisions.d. Evidence about assertions in financial statements.