Which of the following regarding the level of materiality is correct? Select one: a. An increase in materiality will decrease the amount of substantive testing b. In order to decrease detection risk, the auditor would increase materiality. c. A higher risk of material misstatement will require an increase in materiality d. A decrease in materiality will result in a decrease in the cost of an audit

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: 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: 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: Discuss the differences between a first-party, second-party, and third-party audit.

A: The first-party audit is also known as internal audits. This is performed by internal audit…

Q: Which of the following increase control risk?

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

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: 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: 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: Which statement is false

A: Meaning of Internal control The process designed, implemented and maintained by those charge with…

Q: Which of the following statements is NOT accurate as it relates to testing and the audit risk? O…

A: auditor shall test the audit risk and perform the risk assessment procedure in order to determine…

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: The risk that material errors will not be detected is directly controllable by the auditor through…

A: Auditor: An auditor is a person or a group of people who is responsible for conducting an audit of…

Q: What responses should an auditor take based on different levels of acceptable detection risk (DR)?…

A: There are different ways an auditor responds to fraud risks that are assessed and it depends upon…

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: 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: 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: 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…

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: The audit team will choose to reduce the reliance on controls if the _____ is greater than the…

A: The audit team will choose to reduce the reliance on controls if the upper limit rate of deviation…

Q: true when the auditor determines the client has a low risk of material

A: First option is wrong because risk of material misstatements is judged not only based on the…