Select each attribute with the most directly related term. No term is used more than once. Attributes 1. Likelihood a misstatement will not be prevented or detected 2. Substantive procedures and tests of controls 3. Likelihood of misstatement assuming no controls 4. Reporting on internal control and financial statements 5. Creates a reasonable possibility a material misstatement will not be detected 6. Inquiries, analytical procedures, observation 7. Merits attention, less than a material weakness 8. GAAP 9. Inquire, inspect, observe, reperform 10. Follow a transaction through the system Term

Select each attribute with the most directly related term. No term is used more than once. Attributes 1. Likelihood a misstatement will not be prevented or detected 2. Substantive procedures and tests of controls 3. Likelihood of misstatement assuming no controls 4. Reporting on internal control and financial statements 5. Creates a reasonable possibility a material misstatement will not be detected 6. Inquiries, analytical procedures, observation 7. Merits attention, less than a material weakness 8. GAAP 9. Inquire, inspect, observe, reperform 10. Follow a transaction through the system Term

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

None
1) Which of the following statements is the most accurate? a. Data analytics can be exploratory but never confirmatory. b. Data analytics allows auditors to broaden scope of their assurance activities. c. An auditor can always rely more on IT controls than manual controls. d. Application controls can always be relied on when general controls are deemed effective.
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.
H12.
There is no need to perform substantive tests procedures if the control risk is determined to be less than high level. TRUE OR FALSE? WHY?
As general IT controls weaken, the auditor is most likely to(1) reduce testing of automated application controls done by the computer.(2) increase testing of general IT controls to conclude whether they are operatingeffectively.(3) expand testing of automated application controls used to reduce control risk tocover greater portions of the fiscal year under audit.(4) ignore obtaining knowledge about the design of general IT controls and whetherthey have been implemented.
The auditor is typically concerned with two major types of mistakes that materially impact the financial statements when testing controls and when performing substantive testing. Identify the pair of the major mistakes as: A) Risk of Assessing Control Risk Too Low/Risk of Incorrect Rejection B) Risk of Assessing Control risk Too High/Risk of Incorrect Rejection C) Risk of Assessing Control Risk Too Low/Risk of Incorrect Acceptance
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
9
4. Overall risk management arrangements are the main preoccupation of the internal auditor who is concerned with all those controls fundamental to the achievement of organizational objectives. It is main ... On internal and external audit? A. Similarity B. Difference C. No D. Equality connection 5. From taking care of risk perspective what should be done if the Impact of risk is high and likelihood of risk is high ? A. Terminate B. Transfer C. Tolerate D. Communica te 6. From taking care of risk perspective what should be done if the Impact of risk is low and likelihood of risk is low? A. Terminate B. Transfer C. Tolerate D. Communica te
When an auditor decreases the planned assessed level of control risk because certain control procedures were determined to be more effective than anticipated, the auditor would most likely increase the: a. Extent of tests of details. b. Level of inherent risk. c. Extent of tests of controls. d. Level of detection risk.
STATEMENT 1: Significant unexpected fluctuations identified by analytical review procedures will usually necessitate a review of internal control. STATEMENT 2: Working papers should generally contain the nature and extent of audit procedures done, the results of any testing, and the CPA's conclusion about how the findings will affect his report. A. Only Statement 1 is incorrect B. Only Statement 1 is correct C. Both statements are incorrect D. Both statements are correct