The risk of overreliance is 5%, EDR is 2, TRD is 5, and the number of deviations found is 2. The auditor should: Group of answer choices Conclude that controls are not operating effectively. Conclude that controls are operating effectively. Conclude that tolerable misstatement has been exceeded. Conclude that CR

Q: What is the effect on sample size for test of controls of an increase in the auditor's intended…

A: There are two types of control- one where manual procedure is performed and other where it is driven…

Q: The tem

A: Audit engagement basically refers to the engagement of audit services that audit and audit’s clients…

Q: The risk of material misstatement is composed of which audit risk components?a. Inherent risk and…

A: Audit risk: It is the probability that in the materially misrepresented financial statements, the…

Q: 4. Overall risk management arrangements are the main preoccupation of the internal auditor who is…

A: Answer 4: Correct option is A. i.e. Similarity.

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: 12. When the auditor based on his understanding of internal control of the client concludes that the…

A: The auditor based on his understanding of internal control of the client concludes that the controls…

Q: Closing Entries After the accounts have been adjusted at April 30, the end of the fiscal year, the…

A: CLOSING ENTRY Closing Entry is Prepared by any Organisation at the end of the Year. Closing entries…

Q: What is the risk caused by the sample taken by the Auditor that does not describe the…

A: Audit sampling is the audit procedure in which sample is selected to test the whole data or…

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: True or False? Regardless of the rating scale used for an audit report, the audit rating will…

A: An audit is a methodical   disquisition, review, or evaluation of an association's processes,…

Q: • The Choose the answer from the menu in accordance to the question statement _--- method includes…

A: There are many two types of sampling approaches used when auditing the financial statement of the…

Q: 7. Auditors use sampling in performing tests of controls and ______________ Question 7…

A: In audit sampling, the auditor tests all the data on sample basis. The analytical audit procedures…

Q: riances are investigated ation is found, it can be ignored re investigated gement is used to…

A: Auditor: It is a person who is appointed by the government or company in case of internal auditing.…

Q: If the tests of controls indicate certain controls are not as effective as the auditor originally…

A: Test of controls are performed  to determine the effectiveness of the control to detect and correct…

Q: s1: The only way to know with certainty whether a sample Is representative is to subsequently audit…

A: Option (c) is the correct answer i.e. s1 and s2 are true

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: The following are concepts discussedin this chapter:1. Preliminary judgment about 7. Estimated total…

A: a. Following items are audit planning decisions that require professional judgment as follows: 1.…

Q: STATEMENT 1: In an audit sampling application, detection risk arises from the uncertainties of…

A: Audit sampling is a process or procedure in which a sample of items are selected from the total…

Q: As the risk of material misstatement increases, the amount of evidence the auditor will accumulate…

A: Risk of Material Misstatement: This implies a risk that the company's financial statements are…

Q: As the acceptable level of detection risk decreases, an auditor may change the a. Timing of…

A: Introduction:- Acceptable audit risk is the risk that the auditor is ready to take of giving an…

Q: As the desire decreases for a given materiality amount, the sample size necessary to test an…

A: Auditing and Assurance

Q: Comparison of calculated confidence limits with acceptable misstatement is key to difference…

A: Each account has a portion of overall materiality that the company may tolerate. In accounting…

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: A) Consider the likelihood that identified risks could result in material misstatement B) Identify…

A: In order to assess Control Risk/the risk of material misstatement, the auditor would complete all of…

Q: If an audit team calculated a ULRD of 5 percent when the tolerable rate of deviation was 4percent,…

A: Answer: option b

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: state the effect on planned evidence (increase or decrease) of changing each of 'AN INCREASE IN…

A: Audit Risk Audit risk which describes as auditors furnish the inappropriate audit opinion whether…

Q: As the acceptable level of detection risk decreases, an auditor may: A. reduce substantive testing…

A: The requirement is to determine a likely auditor reaction to a decreased acceptable level of…

Q: 1. The audit risk is 3% while the inherent risk is 80% and control risk is 40%. What is the…

A: Audit risk seems to be the chance that the audit would contain human mistakes and so would not be…

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: Which of the following is not compatible with a high level of inherent and control risk? detection…

A: The risk that the processes undertaken by the auditor to reduce audit risk to an acceptably low…

Q: If the _______ is less than the _______, the audit team would conclude that the account balance is…

A: Misstatement: It can be defined as the variations between the actual financial statements being…

Q: A reliance strategy is chosen when the auditor: Multiple Choice Plans on conducting tests of…

A: The method used by auditors to depend on the work done by internal auditors or other independent…

Q: When the auditor identifies that a key control absent he/she would most probably: Select one: a.…

A: d.  Issue a qualified or disclaimer of opinion on internal controls over financial reporting.…