Which of the following assertions with respect to cash is likely the lowest risk?ExistenceValuationCash, in general, is a low risk account and none of the assertions carry much risk.CompletenessWhich of the following would be an example of inherent risk in an audit?An auditor who does minimum testing to reduce workload.O Highly complex and technical transactions that the company engages in.All of these responses are correct.Weak or lacking internal controls When comparing the % of sales in the last month of the year to the total sales for theyear, the auditor notes that the percentage seems significantly higher this periodthan previous periods. The auditor is aware that the management receives a bonusfor meeting certain performance metrics. The sales booked during the last month ofthe year allowed the company to meet that sales metric, earning management thebonus. Given this information, which of the following assertions with respect torevenue would you most likely be concerned about?Both occurrence and cutoffCutoffCompletenessOccurrence

Correct option :- Existence Explanation:- The assertion that "Existence" is likely the lowest risk…

Which of the following assertions with respect to cash is likely the lowest risk? Existence Valuation Cash, in general, is a low risk account and none of the assertions carry much risk. Completeness Which of the following would be an example of inherent risk in an audit? An auditor who does minimum testing to reduce workload. Highly complex and technical transactions that the company engages in. All of these responses are correct. Weak or lacking internal controls

Which of the following assertions with respect to cash is likely the lowest risk? Existence Valuation Cash, in general, is a low risk account and none of the assertions carry much risk. Completeness Which of the following would be an example of inherent risk in an audit? An auditor who does minimum testing to reduce workload. Highly complex and technical transactions that the company engages in. All of these responses are correct. Weak or lacking internal controls

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: t that the client might be making duplicate payments to vendors. The risk that the client’s…

A: Auditing refers to the process of tallying all the transactions of a company by physically checking…

Q: Based on an assessment of audit risk, the auditors are concerned with the following two risks:…

A: Introduction: Audit risk is the possibility that an auditor would overlook faults or commit fraud…

Q: The audit of revenue recognition generally involves significant audit risk for all of the following…

A: Answer: Concept: Audit is an independent investigation performed to identify any loopholes in…

Q: Why are receivables and revenue ripe areas for abuse or outright fraud? Income tax rules have been…

A: Receivables and revenue are ripe areas for abuse or outright fraud as no real event such as actual…

Q: As an auditor, why would we be concerned with a high level of transactions that exceed the Bendford…

A: Benford's Law is a statistical principle that suggests certain digits (1 to 9) occur with…

Q: whether there is a reasonable possibility that the company's internal control system will fail to…

A: Internal control is the managements’ effective and efficient controls for achieving goals and…

Q: n auditor does not need to test the effectiveness of automated controls in a computerized system.…

A: Auditors are responsible are maintaining the account and checking accounts and checking accuracy of…

Q: 2. Which technique would be most effective and efficient for testing the operating effectiveness of…

A: The bank reconciliation statement is the statement that is prepared to rectify the errors between…

Q: Which is NOT a source of fraud risk (from the Fraud Triangle)? a) Fraud Tip Hotline b) Perceived…

A: According to the Fraud Triangle, all three elements - opportunity, motivation or pressure, and…

Q: Which of the following fraudulent activities most likely could be perpetrated due to the lack of…

A: The auditor Is responsible for forming an opinion on the financial statement and the main reason for…

Q: i need the answer quickly

A: Analyzing the optionsa) Confirm more accounts receivable than earlier planned: This option would not…

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: The acceptable audit risk for the financial statements overall tends to be low and is set by the…

A: In auditing, setting the acceptable audit risk for financial statements is crucial for ensuring the…

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: ubstantive analytical procedures are more reliable A) In an industry environment that is unstable…

A: Substantive Analytical procedures are those procedures which is used for large/high volume…

Q: In which of the following circumstances would an auditor expect to find that an entity had…

A: Definition: Audit: Audit is the process of verification of the compliance of the financial…

Q: When and why are analytical procedures performed by an auditor? Select all that apply. risk response…

A: Analytical procedures are a critical part of the audit process, helping auditors gain insights into…

Concept explainers

Fraud

Fraud in accounting is the planned manipulation of financial documents to make a false appearance of corporate financial health. Moreover, it includes an employee, accountant, or the company itself misleading investors and shareholders.

Question

Which of the following assertions with respect to cash is likely the lowest risk?
Existence
Valuation
Cash, in general, is a low risk account and none of the assertions carry much risk.
Completeness
Which of the following would be an example of inherent risk in an audit?
An auditor who does minimum testing to reduce workload.
O Highly complex and technical transactions that the company engages in.
All of these responses are correct.
Weak or lacking internal controls

When comparing the % of sales in the last month of the year to the total sales for the
year, the auditor notes that the percentage seems significantly higher this period
than previous periods. The auditor is aware that the management receives a bonus
for meeting certain performance metrics. The sales booked during the last month of
the year allowed the company to meet that sales metric, earning management the
bonus. Given this information, which of the following assertions with respect to
revenue would you most likely be concerned about?
Both occurrence and cutoff
Cutoff
Completeness
Occurrence

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Solution 1

VIEW

Solution 2

VIEW

Solution 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Please explain how you arrived at the correct answer. Thank you. 1. Auditors must consider fraud in their audits. Which is not a key consideration? A) whether fraud is present. B) whether technology is involved. C) whether fraud is material. D) all of these are true
Which of the following factors creates an opportunity for fraud to be committed in an organization? a. Management demands financial success. b. Poor internal control. c. Commitments tied to debt covenants. d. Management is aggressive in its application of accounting rules.
The audit risk model includes the four risks listed below. Match the type of risk with the related definition.A. Detection riskB. Control riskC. Inherent riskD. Audit risk___ 1. The probability that an auditor will give an inappropriate opinion on financial statements.___ 2. The probability that audit procedures will fail to produce evidence of material misstatements.___ 3. The probability that the client's internal control policies and procedures will fail to detect material misstatements if they have entered the accounting system.___ 4. The probability that material misstatements have occurred in transactions entering the accounting system.
In accounting, which term describes deficiencies or flaws in the design or operation of internal controls that could increase the risk of errors, fraud, or misstatements in financial reporting? a) External audit b) Compliance review c) Internal control weaknesses d) Financial statement analysis