true when the auditor determines the client has a low risk of material
Q: Auditors have not been successful in measuring the components ofthe audit risk model. How is it…
A:
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: During financial statement audit, auditors seek to restrict which type of risk? Control risk,…
A: Discovery hazard is the opportunity that an inspector will neglect to discover material misquotes…
Q: When performing audit procedures, the auditor is faced with an uncertainty of not detecting material…
A: Define sampling risk. Sampling risk is the risk that a sample statistic will differ from the true…
Q: oo high, o
A: Since auditors can and often do not seek to review all activities, audit risk is essential to the…
Q: Which of the following tests are considered further audit procedures that may be designed after…
A: Substantive test of details are considered further audit procedures that may be designed after…
Q: Maintaining an unbiased attitude during the audit illustrates: Select one: a. Client…
A: The auditor should maintain integrity, professionalism skepticism, professional competence,due…
Q: The risk that a client's financial statements are susceptible to material misstatements is a.…
A: SOLUTION- INHERENT RISK IS THE RISK POSED BY AN ERROR OR OMISSION IN A FINANCIAL STATEMENT DUE TO A…
Q: MUS's auditor assesses what is an acceptable misstatement
A: Dollar unit sampling (MUS) is a quantitative sampling procedure that is sometimes referred to as…
Q: The risk that the auditors will conclude, based on substantive procedures, that a material…
A: The risk you are referring to is known as the risk of substantive procedures not detecting a…
Q: Understand auditors’ responsibility forsubsequent events and subsequentlydiscovered facts
A: Subsequent Event: A subsequent event is an event or transaction that occurs after the date of the…
Q: the susceptibility of an account balance or class of transactions to misstatements that could be…
A: Internal controls: Internal controls are maintained to decline the possibility of fraud. They ensure…
Q: Which of the following regarding the level of materiality is correct? Select one: a. An increase in…
A: Materiality is a concept used in auditing to determine the significance or importance of an item or…
Q: Describe a situation that would require an auditor to give an unmodified opinion without a standard…
A: Introduction: Unmodified opinion generally gives when the financial statements showing as fairly. It…
Q: When performing a financial statement audit, auditors are required to explicitly assess the risk of…
A: A financial statement is said to have a substantial misrepresentation if it contains information…
Q: As auditors expect certain accounts to have more misstatements than others, both overstatements and…
A: Answer:- Auditing:- In order to confirm that a process or quality system is operating in accordance…
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: The maximum amount of error in a population that the auditor is willing to accept is referred to as…
A: Acceptable risk is the auditor’s level of risk that they are willing to accept to release an…
Q: Auditors have two strategies to choose from, the lower-assessed control risk strategy and the…
A: Incorrect (c)Auditors can always choose to use the predominantly substantive strategy regardless of…
Q: he factor that distinguishes an error from fraud or other irregularities is A) materiality. B)…
A: Lets understand the basics. Audit is an examination of book of account in order to give an opinion…
Q: EXPLAIN.Which of the following is not done by an auditor when obtaining an understanding of an…
A: Internal controls are the mechanisms and standards that businesses use to protect their sensitive…
Q: An auditor has completed the risk assessment process for the firm and is evaluating the results. If…
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Q: The auditor shall express an adverse opinion when a matte
A: Auditor: Auditors can be a person or firm appointed by the company to review and provide opinions on…
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: Detection risk is the risk that O a client's system of internal controls will not prevent or detect…
A: Auditing means the independent checking of company operation by outsider. Auditor is qualified and…
Q: In auditing, ____________ is the process of identifying and assessing the risks of material…
A: Auditing refers to an official inspection of the financial information of an organization. Auditing…
Q: Explain when performing an auditor, the auditor could sometimes be permitting the sum of the…
A: Verifying and certifying financial statements through auditing helps to assure their accuracy and…
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: Identify situations in which auditors addexplanatory language to an unmodifiedopinion.
A: Unmodified opinion is where an auditor expresses an opinion that financial statements are presented,…
Q: Risk of incorrect acceptance is defined as _______. the risk that the auditor concludes that a…
A: Risk of incorrect acceptance may be defined as situation where audit sample supports a conclusion…
Q: The higher the risk of material misstatements the lower should audit risk be taken. True or false
A: Audit risk is the risk that an auditor expresses an inappropriate opinion. This is the risk that…
Q: The risk that audit evidence for a segment will fail to detect misstatements exceeding tolerable…
A: Audit evidence refers to all sorts of information, or bunch of documents or any sort of data…
Q: In a financial statement audit, inherent risk represents a. The risk that misstatements could occur…
A: In financial and managerial accounting, Inherent risk is that the risk expose by a slip-up or…
Q: What are the risks if the auditor concludes controls are operating effectively based on the sample…
A: Definition: Sampling risk: Sampling risk is a risk that arises when the judgments based on the…
Q: audit risk.
A: First option is wrong because the inherent risk is the risk of material misstatements that may exist…
Q: maximur
A: the auditor after considering the client's internal control over receivables increased the…
Q: aterial misstatement exists when it does not exist the risk that an auditor incorrectly…
A: Risk of incorrect rejection is defined as the risk that the auditor concludes that a…
Q: CONTRAST THE CIRCUMSTANCES IN WHICH THE AUDITOR WOULD CHOOSE NOT TO TEST CONTROLS WITH THOSE IN…
A: The test of controls in auditing are the procedures used by the auditors to evaluate the internal…
Q: Recall the definition of inherent risk. Why is it important for internal auditors to focus on…
A: The answer is given in the below step.
Q: It refers to the risks that a material misstatement will even occur, that it would not be prevented…
A: Note: As per our guidelines, we will solve the first question. The risk created by a financial…
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- The auditor faces a risk that the examination will not detect material misstatements in the financial statements. In regard to minimizing this risk, the auditor primarily relies on: a. Substantive tests b. Internal control c. Tests of controls d. Statistical analysisThe 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 AcceptanceExplain how the auditor determines tolerable misstatement for MUS
- In deciding upon the acceptable risk of incorrect acceptance for an account, an auditor considers each of the following except a. Audit risk. b.Tolerable error. c.The risk that internal controls fail to detect material misstatements that have occurred. d. The risk that analytical procedures and other tests fail to detect material errors that occur and that are not detected by internal control.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.Auditors often use a client's historical experience and subsequent transactions to evaluate the reasonableness of estimates. Question options: True False
- Explain the departures an auditor can award a client from an unqualified audit report.Auditors often use a client's historical experience and subsequent transactions to evaluate the reasonableness of estimates. Question options: True FalseWhich of the following is consistent with an assessed level of control risk at below the maximum level after completing the auditors consideration of the client’s internal control over receivables? Increased materiality level in selecting receivables to be confirmed and use a positive confirmation letter. Increased materiality level in selecting receivables to be confirmed and use a negative confirmation letter. Decrease materiality level in selecting receivables to be confirmed and use a negative confirmation letter. d. Decrease materiality level in selecting receivables to be confirmed and use a positive confirmation letter.
- The auditor provides no assurance that immaterial misstatements will be detected. * True O FalseWhen completing the audit of internal controls for an issuer, the severity of an internal control deficiency depends ona. Whether there is a reasonable possibility that the company’s controls will fail to prevent or detect a misstatement of an account balance or disclosure.b. Whether a misstatement has actually occurred as a result of the deficiency.c. The magnitude of the potential misstatement resulting from the deficiency or the deficiencies.d. Both a and c are correct.e. All of the above are correct.The tolerable rate of deviation set by the auditor for tests of controls depends primarily on which of the following? a. The planned risk of assessing control risk too low. b. The dollar amount of substantive misstatements. c. The anticipated cause of the errors. d. The tolerable rate used in audits of other clients in the same industry.