Tests of controls in a GAAS audit are used for O Applying analytical procedures to financial statement balances Obtaining evidence about the financial statement assertions O Accomplishing control over the occurrence of recorded transactions O Obtaining evidence about the operating effectiveness of client control activities

Tests of controls in a GAAS audit are used for O Applying analytical procedures to financial statement balances Obtaining evidence about the financial statement assertions O Accomplishing control over the occurrence of recorded transactions O Obtaining evidence about the operating effectiveness of client control activities

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 24CYBK

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Tests of controls in a GAAS audit are required fora. Obtaining evidence about the financial statement assertions.b. Accomplishing control over the occurrence of recorded transactions.c. Applying analytical procedures to financial statement balances.d. Obtaining evidence about the operating effectiveness of client control activitie
Tests of controls in a GAAS audit are required fora. Obtaining evidence about the financial statement assertions.b. Accomplishing control over the occurrence of recorded transactions.c. Applying analytical procedures to financial statement balances.d. Obtaining evidence about the operating effectiveness of client control activities.
Three common types of attestation services are Select one: O a. audits of historical financial information, verifications of historical financial information, and attestations regarding internal controls. b. reviews of historical financial information, verifications of future financial information, and attestations regarding internal controls. audits of historical financial statements, reviews of historical financial statements, and audits of internal control over financial reporting. O d. audits of historical financial information, reviews of controls related to investments, and verifications of historical financial information.
Explain the objective ofconducting an audit of financialstatements and an audit ofinternal controls.
Analytical procedures used when planning an audit should concentrate ona. Weaknesses in the company’s internal control activities.b. Predictability of account balances based on individual significant transactions.c. Management assertions in financial statements.d. Accounts and relationships that can represent specific potential problems and risks in the financial statements.
Once risks are identified, auditors assess the risk of material misstatement at the _______ level for these significant classes of transactions and account balances. A. disclosure B. financial statement C. relevant assertion level D. account
It refers to the risks that a material misstatement will even occur, that it would not be prevented ordetected by client internal controls, and that is not detected by the auditor’s own procedures.a. Inherent riskb. Control riskc. Detection riskd. Audit risk Audit risk and materiality are considered at the level ofa. Overall financial statements.b. Assertions relating to individual account balance, class of transactions, or disclosure.c. Both a and b.d. Neither a nor b.
Justify the purpose of performing a financial statement audit and an internal control audit.
2. An auditor is required to obtain sufficient understanding of each component of an entity’s internal control system to plan the audit of the entity’s financial statements and to assess control risk for the associated assertions in the account balance, transaction class, and disclosure components of the financial statements. a. Define Internal Control b. For what purpose should an auditor’s understanding of the internal control components be used in planning an audit? c. What are an auditor’s documentation requirements concerning an entity’s internal control system and the assessed level of control risk
Which of the following is required documentation in an audit in accordance with generally acceptedauditing standards? Group of answer choices a. A flowchart or narrative of the accounting system describing the recording and classification of transactions for financial reporting. b. All major stakeholder groups. c. An internal control questionnaire identifying controls that assure specific objectives will be achieved. d. The overall audit strategy and audit plan.
Which of the following types of evidence would an auditor most likely examine to determine whether internal control is operating as designed?Select one: a. Client records documenting the use of computer programs. b. Gross margin information regarding the client’s industry. c. Confirmations of receivables verifying account balances. d. Anticipated results documented in budgets or forecasts.
Expalin wether the tools used in the financial statement audit are employed in a fraud examination.