If the potential client operates in a risky industry, the management lacks integrity, and have a high inherent risk. The auditor will assess the acceptable audit risk as: O Extremely Low because the client is consider as extremely high riskyY client OExtremely High because the client is consider as extremely high risky client O Low because the assurance level to be reached is low O High because the assurance level to be reached is high

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

A:

Q: If the auditor is unable to rely on the IT general controls or application controls of a client,…

A: Correct option is D. Control risk as high   If the auditor is unable to rely on the IT general…

Q: Describe what is meant by acceptable audit risk. Explain whyeach of the following statements is…

A: Auditor willingness to accept materially misstated financial statement when the audit of company is…

Q: The risk that a client's financial statements are susceptible to material misstatements is a.…

A: SOLUTION- INHERENT RISK IS THE RISK POSED BY AN ERROR OR OMISSION IN A FINANCIAL STATEMENT DUE TO A…

Q: Which of the following is appropriate about risk assessment? A. The assessed level of inherent and…

A: Risks are the unfavourable situations or circumstances that can make loss for the organisation or…

Q: Describe a situation that would require an auditor to give an unmodified opinion without a standard…

A: Introduction: Unmodified opinion generally gives when the financial statements showing as fairly. It…

Q: The audit risk model is the foundation of audit practice. True False

A: Auditing refers to the independent examination of financial statements and other financial…

Q: Which statement is false

A: Meaning of Internal control The process designed, implemented and maintained by those charge with…

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 are indicators of a high-risk or low-risk profile client? Explain? Poor…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

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: 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: The acceptable audit risk for the financial statements overall tends to be low and is set by the…

A: In auditing, setting the acceptable audit risk for financial statements is crucial for ensuring the…

Q: Detection risk is the risk that O a client's system of internal controls will not prevent or detect…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: audit risk is very high

A: Audit risk means the possibility of the auditor to provide an incorrect opinion on financial…

Q: Risk of incorrect acceptance is defined as _______.     the risk that the auditor concludes that a…

A: Risk of incorrect acceptance may be defined as situation where audit sample supports a conclusion…

Q: Inherent risk is: a. the risk of a misstatement occurring irrespective of any internal controls put…

A: A financial audit seems to be an impartial evaluation and analysis of a firm's financial statements…

Q: If an audit of any of these companies is performed according to the AICPA auditing standards, and…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: Risk assessment procedures include

A: The first statement is false because the risk assessment procedures are the audit procedures to…

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: true when the auditor determines the client has a low risk of material

A: First option is wrong because risk of material misstatements is judged not only based on the…

Q: Which sentence below is true about audit risk:  A. Audit risk is the risk that a company may hire…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

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

A: An auditor, during the preliminary assessment of control risk, evaluates the effectiveness of that…

Q: tch the type of risk with the related definition. A. Detection risk B. Control risk C. Inherent risk…

A: Solution:- 1. The probability that an auditor will give an inappropriate opinion on financial…

Q: audit risk.

A: First option is wrong because the inherent risk is the risk of material misstatements that may exist…

Q: O te O ris

A: Inherent risk is the risk posed by an error or omission in a financial statement due to a factor…

Q: After obtaining an understanding of an entitiy's internal control, an auditor may assess control…

A: Solution: After obtaining an understanding of an entitiy's internal control, an auditor may assess…

Q: Assuming a lack of internal control in a client's system, the risk of material misstatement is known…

A: Internal control refers to the policies, procedures, and practices implemented within an…

Q: The audit risk model includes the four risks listed below. Match the type of risk with the related…

A: Audit risk is the risk that financial statements are material misstatement and audit opinion states…

Q: An auditor assesses control risk because it: A. is relevant to the auditor's understanding of the…

A: Audit: Audit is the process of verification of the compliance of the financial statements. It…

Q: Why does a certified audit present a high degree of risk for a CPA? A. They are difficult to…

A: Ans. Certified audit is auditing of financial statements to give an opinion on the true and fair…

Q: Select which option is correct. Select one or more: A. The level of professional skepticism can be…

A: Professional skepticism is an attitude that includes a questioning mind, being alert to conditions…

Q: A related party transaction is a transfer of resources, services, or obligations between related…

A: As per IAS 24  a related party transaction is a transfer of resources, services, or obligations…

Q: Which of the following is not an underlying principle related to risk assessment? OA. The…

A: An auditor is referred to a professional who is responsible to verify the financial statements of a…

Q: TRUE OR FALSE 1. WHEN OBTAINING AN UNDERSTANDING OF CONTROL ACTIVITIES OF A RELATIVELY SMALL CLIENT,…

A: Auditing is the process of checking and verifying the truthfulness and authenticity of books of…

Q: The difference between assessing control risk for IT control activities versus assessing control…

A: The objective of the question is to understand the difference between assessing control risk for IT…