Which of the following risk factors can result in auditors collecting more audit evidence? A. The client is a private company owned by five shareholders, and all of them are involved in the day-to-day operations. B. The company has decreased its credit limit for new customers from $6,000 to $2,000. C. The client’s CFO left for alternative employment, and no one acted as an interim CFO in the last six months of the financial year. D. Auditors found that the purchase manager had approved 100% of purchase transactions tested. E. The auditor did not detect any material misstatements from the client’s financial reports in the past five financial years.
Which of the following risk factors can result in auditors collecting more audit evidence? A. The client is a private company owned by five shareholders, and all of them are involved in the day-to-day operations. B. The company has decreased its credit limit for new customers from $6,000 to $2,000. C. The client’s CFO left for alternative employment, and no one acted as an interim CFO in the last six months of the financial year. D. Auditors found that the purchase manager had approved 100% of purchase transactions tested. E. The auditor did not detect any material misstatements from the client’s financial reports in the past five financial years.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Which of the following risk factors can result in auditors collecting more audit evidence?
| A. |
The client is a private company owned by five shareholders, and all of them are involved in the day-to-day operations. |
|
| B. |
The company has decreased its credit limit for new customers from $6,000 to $2,000. |
|
| C. |
The client’s CFO left for alternative employment, and no one acted as an interim CFO in the last six months of the financial year. |
|
| D. |
Auditors found that the purchase manager had approved 100% of purchase transactions tested. |
|
| E. |
The auditor did not detect any material misstatements from the client’s financial reports in the past five financial years. |
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