Q1 Question 11 PointWhich of the following is not true about the review of historical financial statements?Review ends up with preparing a report on the reliability of the financial statements.B) Review provides reasonable assurance on the reliability of the financial statements.The auditor uses less evidence and incurs less costs in the review than in the audit.Review provides limited assurance on the reliability of the financial statements.

A)REVIEW ENDS UP WITH PREPARING A REPORT ON THE RELIABILITY OF THE FINANCIAL STATEMENT: It refers to…

Answered: Question 1 Which of the following is…

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

Chapter5: Professional Auditing Standards And The Audit Opinion Formulation Process

Section: Chapter Questions

Problem 7CYBK

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What steps should auditors take if during a compilation engagement they become aware that the financial statements are misleading?
Question 23 Which of the following statements is correct regarding accounts payable and the auditor's procedures? Group of answer choices Because it is generally more difficult to discover a transaction that has not been recorded than to discover one that has been recorded incorrectly, the audit objective of completeness drives many of the substantive procedures applied to these balances. A judgment whether an unrecorded payable should be recorded before the financial statements are prepared depends entirely upon the source of the payable. The confirmation of accounts payable selected from the year-end trial balance of such accounts is most effective in discovering unrecorded liabilities. Unrecorded payables are often discovered through examining vouchers payable entered into the voucher register prior to the balance sheet date.
Define the danger of substantial misrepresentation. RMM is measured by auditors at what level of the financial statements? Explain how auditors evaluate the RMM. What part of substantive testing does RMM play?
Which of the following statements about materiality is incorrect? the preliminary assessment of materiality guides audit planning and testing materiality is used to guide the validity of information contained in the financial report materiality is a key auditing concept that is assessed during the planning stage of every audit information is considered material if it has no impact on the decision-making process of financial report users
12. The audit of revenue and receivables is of significant audit risk because Select one:a. The understatement of revenue results in a corresponding overstatement of net incomeb. Understatement of revenue has been a factor in many instances of fraudulent financial reportingc. Overstatement of revenue has been a factor in many instances of fraudulent financial reporting,d. The overstatement of revenue results in a corresponding understatement of net income
2) During the audit of a client you come to the conclusion that there is minimal likelihood that resolution of an uncertainty will have a material effect on the financial report. Accordingly, assuming nothing else has come to your attention, you should issue: a. A qualified opinion. b. An unmodified opinion. c. An adverse opinion. d. A disclaimer of opinion.
Risk of incorrect acceptance is defined as _______. the risk that the auditor concludes that a material misstatement does not exist when it does exist the risk that the auditor concludes that a material misstatement does exist when it does exist the risk that an audit firm incorrectly issued an unmodified opinion the risk that an audit firm incorrectly accepts a client The objective of auditors is to obtain _______. sufficient appropriate audit evidence regarding the assessed risks of material misstatement sufficient appropriate audit evidence regarding the assessed risks of immaterial misstatement sufficient appropriate audit evidence from internal control only regarding the assessed risks of material misstatement insufficient appropriate audit evidence regarding the assessed risks of material misstatement When an adverse opinion is issued regarding internal control over financial reporting (ICFR), the…
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which of the following regarding errors is correct Select one: a. it is easier for the auditor to detect because it is not intentional b. misappropriation of assets is an kind of errors c. it is more difficult for the auditor to detect because it is not intentional d. intentional misstatement of the financial statements,
{Auditing} 10. Choose the circumstances in which financial statements are not true and fair. a. When the auditor assures outsiders that the financial statements are reliable b. When the auditor is unable to assure outsiders that the financial statements are proper c. When the auditor assures that sufficient and appropriate audit evidence are obtained in support of financial statements d. When the auditor assures outsiders that the financial statements free from manipulation
None
Which of the following is not true a. Inherent risk and control risk are assessed by the auditor and function independently of the financial statement audit b. Inherent risk is inversely related to the amount of audit evidence whereas detection risk is directly related to the amount of audit evidence required c. Inherent risk is directly related to evidence whereas detection risk is inversely related to the amount of audit evidence required d. Inherent risk is the susceptibility of the financial statements to material error, assuming no internal controls

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