When the computed upper exception rate is greater than the tolerable exception rate, it is necessary for the auditor to take specific action. Which of the following courses of action would be most difficult to justify?     Reduce the tolerable exception rate so as to accept the sample results.     Expand the sample size and perform more tests.     Revise the assessed control risk.     Write a letter to management which outlines the control deficiencies.

Q: Explain how decisions about when and how much substantive testing is performed relate to the overall…

A: The substantive testing is a method used by the audit staff to gather evidence about the…

Q: In response to an increased level of assessed risk of material misstatement, an auditor of…

A: The auditor shall perform RAP i.e Risk Assessment Procedure that provides a reasonable assurance…

Q: In assessing sample risk, alpha risks relate to the     Efficiency of the audit Selection of the…

A: Sampling Risk: The risk of sampling is that the items chosen for a sample are not truly…

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: Accounting analyse the impact the discovery of control deficiencies will have on the approach to…

A: Sampling is the process of picking a specific number of observations from a larger population in…

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: Which of the following increase control risk?

A: The answer for the multiple choice question and relevant explanation are presented hereunder : What…

Q: The assessment of control risk can be made at any of the following times except:

A: Correct option is B. After performing all the necessary substantive tests.

Q: Ordinarily, risk assessment procedures do not involve the use of audit sampling. However, the…

A: The purpose of audit risk assessment is to gain a better understanding of Organisation and its…

Q: What is the effect on sample size for substantive procedures of an increase in the total error that…

A: The lower the reliance on the results of a substantive procedure using audit sampling, the higher…

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: Which of the following is not a common procedure for assessing operating effectiveness of preventive…

A: Preventive controls is a measure of safeguards implemented by an organisation to proactively…

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: Effectiveness of audit procedures would be reduced bya. Selecting larger sample sizes for audit.b.…

A: Audit: Audit is the process of verification of the compliance of the financial statements. It…

Q: What are the advantages of sampling items in a population instead of testing every item? (Several…

A: Audit sampling is the application of an audit procedure to less than 100 percent of the items within…

Q: Explain

A: In Statistical sampling, there are equal chances of selection of each sampling unit whereas in…

Q: What is the tolerable rate of deviation? How does the audit team use it when deciding whether torely…

A: Tolerable rate of deviation: Tolerable rate of deviation is the maximum rate of deviation is used by…

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: An auditor who uses statistical sampling for attributes in testing internal controlsshould reduce…

A: Sampling: Sampling can be defined as the process under which small number of observations is taken…

Q: Which of the following steps involved with determining the upper limit on misstatements is…

A: Determine the audited value of the item and compare it to the recorded balance is step involved with…

Q: Which of the following factors used to determine sample size is normally based on the extentto which…

A: Sampling: Sampling allows an individual obtain the information about the population of interest in…

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: 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: 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: Which of the following is an advantage of nonstatistical sampling?a. It measures the audit team’s…

A: Non-statistical sampling: It refers to the method of sampling where the selection of the sample is…

Q: In an environment that is highly automated, an auditor determines that it is not possible toreduce…

A:

Q: TRUE OR FALSE When sampling is used by an auditor, an element of uncertainty is present in the…

A: ‘’Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: When the risk of material misstatement due to fraud is considered high in a particular area, which…

A: The risk of substantial misstatement due to fraud refers to the possibility of financial statements…