Assets are the most valuable item for a company. The company applies controls over assets for its safeguard and detection of assets frauds. The auditor also tests these controls to determine the nature and extent of the audit procedures applied for audit of assets. Audit risk is a risk that audit may provide an inappropriate opinion on the basis of his findings during the audit. There are some inherent risks and avoidable risk which result in an audit risk. To choose: The action of the auditor if the control risk is low.

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Chapter 14, Problem 14.20MCQ

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Assets are the most valuable item for a company. The company applies controls over assets for its safeguard and detection of assets frauds. The auditor also tests these controls to determine the nature and extent of the audit procedures applied for audit of assets.

Audit risk is a risk that audit may provide an inappropriate opinion on the basis of his findings during the audit. There are some inherent risks and avoidable risk which result in an audit risk.

To choose: The action of the auditor if the control risk is low.

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a1.Which of the following best describes the auditors’ approach to auditing property, plant and equipment on continuing audit? Multiple Choice A. Perform analytical procedures. B. Substantiating all property, plant & equipment at year end. C. Audit the additions and reductions in property, plant & equipment during the period. D. Take a complete inventory of property, plant & equipment. a2.Which of the following is true about the audit of property, plant & equipment? Multiple Choice A. For the first audit of company, the audit of these accounts may require substantial additional time. B. Because of the materiality of these accounts, they generally require a substantial amount of audit time. C.One of the most difficult assertions to audit for these accounts is existence. D. Confirmation is an important audit procedure for these accounts.

In performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? a. Is depreciation calculation and recording automated? b. Is there periodic physical count and tagging of property, plant and equipment? Is the result of the count reconciled to ledgers and general ledgers? c. Both a and b. d. Neither a nor b.

In performing risk assessment procedures for property, plant and equipment, an auditor may inquire of the client personnel which of the following questions? a. Is depreciation calculation and recording automated? b. Is there periodic physical count and tagging of property, plant and equipment? Is the result of the count reconciled to ledgers and general ledgers? c. Both a and b. d. Neither a nor b. Group of answer choices a c b d