Part I a.
Identify the activity that will be done for reducing control risk approach and substantive approach.
Part I b.
Explain the advantagesof reducing control risk approach Person RS planned to used
have over the substantive approach previously used in the audit of Company MP.
Part I c.
Explain the advantages of substantive approach over the reducing control riskapproach.
Part IIa.
Describe the meaning of 0.17 in audit.
Part II b.
Calculate Planned Detection Risk (PDR) assuming that Person RS had assessed control risk at 100% and all otherrisks as they are stated.
Part IIc.
Describe the effect of the answer in requirement b. on the planned audit proceduresand
Part III.
Explain whether the revised judgements of staff person on the effect of tests controlson planned substantive tests and also explain the nature basis of any disagreement. Explain the implicationsof the results on the auditor’s internal control report if auditor B issued a report on internal control over financial reporting.
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Chapter 13 Solutions
Auditing and Assurance Services (16th Edition)
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