True or False 1. The main source of the auditor's understanding about the status of cases and litigations faced by the entity is the entity's legal counsel 2. Control activities may be applied on either manual system, computerized system, or combination of both 3. Studying the relationship of financial information with another information, whether financial or non-financial, is an example of an analytical procedure 4. To reduce audit risk to an acceptable low level, the auditor should determine overall responses to assessed risks at the assertion level 5. It is necessary for the audit team members to have a collective knowledge needed to carry out the engagement 6. An important responsibility of an auditor is the establishment and maintenance of internal control on an ongoing basis 7. Generally, the more reliable internal controls are, the lesser the substantive test procedures the auditor would need to perform in auditing year-end account balances 8. The industry in which the client operates may give rise to specific risks of material misstatements arising from the nature of the business or the degree of regulations 9. Objectives are the overall plans for the entity, while the strategies are the operational approachees by which management intends to achieve its objectives 10. Not all controls are relevant to the auditor's risk assessment 11. In first time audits, the audit program is completed during the planning phase of the audit 12. The auditor's primary consideration regarding client's internal controls is the provision of constructive suggestions to management regarding the company's internal controls 13. The determination and assessment of significant risks in audit is a matter of the auditor's professional judgment 14. In internal control components, risk assessment means providing an understanding of individual roles and responsibilities pertaining to internal control over financial reporting 15. The objective of performing analytical procedures in planning an audit is to obtain an understanding of the transactions and events that are reflected in the financial statements, and determining unusual items which could indicate possible misstatements in the financial statement 16. For financial reporting purposes, an entity's risk assessment process is its identification, analysis, and management or risk relevant to the preparation of financial statements following GAAP
True or False
1. The main source of the auditor's understanding about the status of cases and litigations faced by the entity is the entity's legal counsel
2. Control activities may be applied on either manual system, computerized system, or combination of both
3. Studying the relationship of financial information with another information, whether financial or non-financial, is an example of an analytical procedure
4. To reduce audit risk to an acceptable low level, the auditor should determine overall responses to assessed risks at the assertion level
5. It is necessary for the audit team members to have a collective knowledge needed to carry out the engagement
6. An important responsibility of an auditor is the establishment and maintenance of internal control on an ongoing basis
7. Generally, the more reliable internal controls are, the lesser the substantive test procedures the auditor would need to perform in auditing year-end account balances
8. The industry in which the client operates may give rise to specific risks of material misstatements arising from the nature of the business or the degree of regulations
9. Objectives are the overall plans for the entity, while the strategies are the operational approachees by which management intends to achieve its objectives
10. Not all controls are relevant to the auditor's risk assessment
11. In first time audits, the audit program is completed during the planning phase of the audit
12. The auditor's primary consideration regarding client's internal controls is the provision of constructive suggestions to management regarding the company's internal controls
13. The determination and assessment of significant risks in audit is a matter of the auditor's professional judgment
14. In internal control components, risk assessment means providing an understanding of individual roles and responsibilities pertaining to internal control over financial reporting
15. The objective of performing analytical procedures in planning an audit is to obtain an understanding of the transactions and events that are reflected in the financial statements, and determining unusual items which could indicate possible misstatements in the financial statement
16. For financial reporting purposes, an entity's risk assessment process is its identification, analysis, and management or risk relevant to the preparation of financial statements following GAAP
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
