d. For each of the following, determine how the effectiveness of the entity's internal control affect the sufficiency and appropriatenessof evidence gathered by auditors.a As the entity's intemal control is more effective. auditors would asesslavels of material minstatament This would allow them to permit alevel of detection risk, which meens that they could gathersufficient andappropriate evidence.bAs the ontity's internal control is less effective, auditors would asseslevels of material misatatement. This would requre auditorsto controi detoction risk tolevels, which means that they would be required to gathersufficient andappropriate evidencelessmore

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

For each of the following, determine how the effectiveness of the entity's internal control affect the sufficiency and appropriateness evidence gathered by auditors. As the entity's intemal control is mone effective. auditors would assess levels of material miastatement. This would allow them bo permila level of detection risk, which means that they could gather appropriate evidence. sufficient and As the entity's internal control is less effective, auditors would assess levels of material misstatement This would requre auditors to control detection rink te levels, which means that they would be required to gather sufficient and approprate evidence less

For each of the following, determine how the effectiveness of the entity's internal control affect the sufficiency and appropriateness evidence gathered by auditors. As the entity's intemal control is mone effective. auditors would assess levels of material miastatement. This would allow them bo permila level of detection risk, which means that they could gather appropriate evidence. sufficient and As the entity's internal control is less effective, auditors would assess levels of material misstatement This would requre auditors to control detection rink te levels, which means that they would be required to gather sufficient and approprate evidence less

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Similar questions

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
When a substantive audit strategy is adopted, an auditor will O determine internal controls are effective in mitigating risks. O increase the amount of their substantive testing. O test controls extensively. O not need to document the internal control system.
Strong internal control will increase the reliability of certain types of evidence and thereby increase the overall quantity of substantive procedures performed by the auditors. True or False True False
As an auditor, it is important to gain a comprehensive understanding of every aspect of a client’s internal control. This helps in evaluating control risk and preparing for the audit of the client’s financial statements. Choose one of the following questions to discuss: For what purposes should an auditor use their understanding of internal control components to plan an audit? What factors should an audit team consider when trying to reduce the planned assessed level of control risk below the maximum? What are the documentation requirements for a client’s internal control and assessed level of control risk?
Why do we consider risk assessment the foundation of the internal audit function? To safeguard independence, many internal audit departments continue to perform risk assessments in a silo, without collaborating with and leveraging the work of ERM. Do you agree with this approach?
The auditors' working papers will generally be least likely to include documentation showing how the: Multiple Choice engagement had been planned. client's schedules were prepared. client's internal control structure had been considered. unusual matters were resolved.
Which of the following is correct about control risk? Select one: a. None of the others b. The risk that a material misstatement could occur in a relevant assertion and not be prevented or detected on a timely basis by the entity’s internal control. c. It is an alternative to substantive testing d. It is the same as inherent risk.