In auditing accounts receivable, the negative form of confirmations request is used when A. Response rate to positive confirmation request was low B. The total amount of account receivable is immaterial to the financial statement taken as a whole C. Recipients are likely to return positive confirmation without verifying the information D. The combined assessed level of both inherent risk and control risk relative to account receivable is low

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: ditor is testing internal control procedures that are evidenced on an entity's vouchers by matching…

A: Auditor is mainly responsible for mainataining proper control and maintain accounts in very proper…

Q: Assertions with high inherent risk are least likely to involve  a. complex calculations b.…

A: Routine transactions doesn't have assertions with high inherent risk.

Q: When the client’s internal control are good, internal documents are more reliable than external True…

A: The question is related to true or false on Auditing.

Q: Imagine that you were auditing accounts receivable balances to confirm sales and found significant…

A: The objective of this question is to find an alternative approach to confirm sales revenue when…

Q: whether there is a reasonable possibility that the company's internal control system will fail to…

A: Internal control is the managements’ effective and efficient controls for achieving goals and…

Q: n auditor does not need to test the effectiveness of automated controls in a computerized system.…

A: Auditors are responsible are maintaining the account and checking accounts and checking accuracy of…

Q: Select each attribute with the most directly related term. No term is used more than once.…

A: Audit is the inspection of the accounts of organisation. It is performed by an independent body. The…

Q: Which of the following statements is correct regarding detection risk and the audit risk model? OA.…

A: Audit risk is a tool for auditor to evaluate various risks may arise while performing an audit.…

Q: Which of the following terms best describes the risk that audit procedures will fail to detect…

A: The Correct Option is C

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: 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: How do bank confirmations differ from positive confirmations ofaccounts receivable? Distinguish…

A: Auditing:   In auditing, auditors verify the correctness and fair presentation of financial…

Q: analytical procedures

A: First option is correct because analytical procedures assist to identify the risk by comparing the…

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: 1. What is the primary reason that auditors’ assess internal control? a)To determine the risk of…

A: Internal Control:It is a process that is being  effected by an entity's board of directors,…

Q: When an audit team does not receive a response on a positive accounts receivable confirmation,…

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

Q: Which of the following is least likely to be a factor that might indicate to an auditor that an…

A: special considerations are used by auditors where there is a high risk of material misstatements in…

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: From the options given below identify type of risk in case auditor unable to provide appropriate…

A: Auditor is the person who is responsible for verifying authenticity of the financial statements…

Q: True or False Accounts receivable confirmations are likely to be more effective for the existence…

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

Q: Once risks are identified, auditors assess the risk of material misstatement at the _______ level…

A: Solution: Once risks are identified, auditors assess the risk of material misstatement at the…

Q: When making a decision about the dollar amount in an account balance based on a sample, the audit…

A:

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: Explain why the audit of prepaid insurance should ordinarily take arelatively small amount of audit…

A:

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: A material weakness is a situation in whicha. It is probable that an immaterial financial statement…

A: Material weakness: Combination of deficiencies in internal control over financial reporting of the…

Q: With respect to fraudulent financial reporting, which one of the following statements is not…

A: Auditor can obtain reasonable assurance only, not an absolute assurance.

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 of the following statements about confirming accounts receivable (A/R) and accounts payable…

A: Confirmations regarding the accounts balances are one of the important elements in determining the…

Q: audit risk.

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

Q: Which of the following is an incorrect statement?       a. The amount of audit work should vary…

A: The person that analyzes the books of the company is known as the auditor. The auditor checks all…

Q: To allocate the preliminary estimate of materiality to the accounts, the auditor might consider A.…

A: in order to plan the nature timining and extent of the audit procedure that is needed to perform the…

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: As lower acceptable levels of both audit risk and materiality are established, theauditor should…

A: Option (1) is Correct : As lower acceptable levels of both audit risk and materiality are…

Q: An auditor discovered the following matters while performing tests of controls: 1.An obligation for…

A: Internal Controls: The process designed, implemented, and maintained by those charged with…

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: Which of the following evidence provides the least assurance of reliability? A. Accounts receivable…

A: Audit evidences can be collected from internal and external sources. Internal evidences are based on…

Q: Which one of the following statements is most appropriate to Control risk? Susceptibility of account…

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

Q: S1: Stratification in audit sampling enables the auditor to direct his efforts towards the items he…

A: solution concept stratification means method of dividing the data into different groups so that the…

Q: In deciding upon the acceptable risk of incorrect acceptance for an account, an auditor considers…

A: Auditing is the procedure of finding the errors and misstatements presented in the financial…

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…

Q: What is risk of incorrect acceptance?     A. The risk that the auditor concludes that a material…

A: The risk of incorrect acceptance is referred to a situation in which the results of an audit sample…