AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
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Chapter 13, Problem 5RQ
To determine
Explain the process by which an auditor resolves the apparent inconsistency.
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Students have asked these similar questions
A considerable portion of the tests of controls and substantive tests of transactions are performed simultaneously as a matter of audit convenience. But the substantive tests of transactions procedures and sample size, in part, depend on the results of the tests controls. How can the auditors resolve this apparent inconsistency?
The risk that material errors will not be detected is directly controllable by the auditor through substantive tests of details and other substantive audit procedures.
IS THE STATEMENT TRUE OR FALSE? WHY?
Ordinarily, risk assessment procedures do not involve the use ofaudit sampling. However, the auditor often plans and performs tests of controls concurrently with obtaining an understanding of the design of controls and determining whether they have been implemented.
TRUE OR FALSE? WHY?
Chapter 13 Solutions
AUDITING+ASSURANCE 12MONTH ACCESS CARD
Ch. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Explain how the calculation and comparison to...Ch. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - For each of the eight types of evidence discussed...
Ch. 13 - Prob. 11RQCh. 13 - Prob. 12RQCh. 13 - Prob. 13RQCh. 13 - Prob. 14RQCh. 13 - Prob. 15RQCh. 13 - Prob. 16RQCh. 13 - Prob. 17RQCh. 13 - Prob. 18RQCh. 13 - Prob. 19RQCh. 13 - Prob. 20RQCh. 13 - Prob. 21.1MCQCh. 13 - Prob. 21.2MCQCh. 13 - A conceptually logical approach to the auditors...Ch. 13 - Prob. 22.1MCQCh. 13 - Prob. 22.2MCQCh. 13 - Prob. 22.3MCQCh. 13 - Prob. 23.1MCQCh. 13 - b. Substantive analytical procedures are most...Ch. 13 - Prob. 23.3MCQCh. 13 - Prob. 24DQPCh. 13 - Prob. 25DQPCh. 13 - Prob. 26DQPCh. 13 - Prob. 27DQPCh. 13 - Prob. 28DQPCh. 13 - Prob. 29DQPCh. 13 - Prob. 30DQPCh. 13 - Prob. 31DQPCh. 13 - Prob. 32DQPCh. 13 - Prob. 33DQPCh. 13 - Prob. 34DQPCh. 13 - Prob. 35DQP
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Similar questions
- Which of the following is not a technique of collecting audit evidence? a. Analytical procedures. b. Observation and inspection. c. Collecting primary data d. Inquiries from third parties.arrow_forwardOwing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs. Discuss this statementarrow_forwardThe auditor faces a risk that the examination will not detect material misstatements in the financial statements. In regard to minimizing this risk, the auditor primarily relies on: a. Substantive tests b. Internal control c. Tests of controls d. Statistical analysisarrow_forward
- The auditor faces a risk that the audit will not detect material misstatements that occur in the accounting process. To minimize this risk, the auditor relies primarily on 1. substantive tests. 2. tests of controls. 3. internal control. 4. statistical analysis.arrow_forwardWhich among the following is not a major purpose of onsite fieldwork conducted by the auditor as a part of overall audit process? a. Evaluation of adequacy of internal controls b. Evaluation and identification of risks involved. c. Reviewing procedures and processes d. Testing the compliance with policies and proceduresarrow_forwardIn an environment that is highly automated, an auditor determines that it is not possible toreduce detection risk solely by using substantive tests of transactions. Under these circumstances, the auditor most likely woulda. Perform tests of controls to support a lower level of assessed control risk.b. Increase the sample size to reduce sampling risk and detection risk.c. Adjust the materiality level and consider the effect on inherent risk.d. Apply analytical procedures and consider the effect on control riskarrow_forward
- Incorporating elements of unpredictability in the selection of audit procedures to be performed by auditors is important.Explain whyarrow_forwardWhich one below is not an example of auditors'substantive testing? Select one: a. Controls testing. b. Tests of transactions. c. Tests of balances. d. Substantive analytical procedures.arrow_forwardWhich of the following is not the factor to be considered by an auditor while performing analytical procedures? O a. Develop expectation of recorded amounts or ratios and evaluate whether the expectation is sufficiently precise to identify misstatement O b. Evaluate reliability of data O c Determine suitability of overall audit strategy O d. Determine suitability of particular substantive analytical procedure for given assertionarrow_forward
- As auditors move from the planning phase to the fieldwork phase of an audit, they recognize they will not be able to test all transactions in order to offer their opinion on the financial statements. Therefore, various sampling techniques and principles have been developed to assist the auditor in providing adequate coverage and a reliable opinion using samples of transactions. Discuss audit sampling for tests of details of balances and for tests of controls and substantive tests of transactions. How do they differ?arrow_forwardwhich of the following is correct about the appropriateness of evidence? A. Audit evidence from external sources is more relevant than evidence generated internallyB. Audit evidence is more persuasive when items of evidence from different sources or of different nature are not consistentC. Audit evidence generated internally is more reliable when the related accounting and internal control systems are effectiveD. Sufficiency refers to the amount of evidence neededarrow_forwardEXPLAIN.Which of the following is not done by an auditor when obtaining an understanding of an entity's internal controls? Identify the types of potential misstatements that can occur. Consider the operating effectiveness of the internal controls. Design substantive tests. Consider factors that affect the risk of material misstatements.arrow_forward
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