EBK AUDITING+ASSURANCE SERVICES
17th Edition
ISBN: 9780135171219
Author: ARENS
Publisher: PEARSON CO
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Chapter 17, Problem 21.2MCQ
To determine
Identify the effect that would have on increases in tolerable misstatement and assessed level of control risk to
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Students have asked these similar questions
Why is the audit team more concerned with the risk of overreliance than with the risk of underreliance?
For both tests of controls and substantive tests of details, non-sampling risk can be reduced by increasing sample size, while sampling risk can be reduced by proper engagement planning supervision and review.
TRUE OR FALSE? WHY?
Explain how the following test of control will affect the sample size?
a. An increase in the extent to which the auditor's risk assessment takes into account relevant controls
b. An increase in the tolerable rate of deviation
c. An increase in the expected rate of deviation of the population to be tested
Chapter 17 Solutions
EBK AUDITING+ASSURANCE SERVICES
Ch. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 8RQCh. 17 - Prob. 9RQCh. 17 - Prob. 10RQ
Ch. 17 - Prob. 11RQCh. 17 - Prob. 12RQCh. 17 - Prob. 13RQCh. 17 - Prob. 14RQCh. 17 - Prob. 15RQCh. 17 - Prob. 16RQCh. 17 - Prob. 17RQCh. 17 - Prob. 18RQCh. 17 - Prob. 19RQCh. 17 - Prob. 20RQCh. 17 - Prob. 21.1MCQCh. 17 - Prob. 21.2MCQCh. 17 - Prob. 21.3MCQCh. 17 - Prob. 22.1MCQCh. 17 - Prob. 22.2MCQCh. 17 - Prob. 22.3MCQCh. 17 - Prob. 23.1MCQCh. 17 - Prob. 23.2MCQCh. 17 - Prob. 23.3MCQCh. 17 - Prob. 24.1MCQCh. 17 - Prob. 24.2MCQCh. 17 - Prob. 24.3MCQCh. 17 - Prob. 25DQPCh. 17 - Prob. 26DQPCh. 17 - Prob. 27DQPCh. 17 - Prob. 28DQPCh. 17 - Prob. 29DQPCh. 17 - Prob. 30DQPCh. 17 - Prob. 31DQPCh. 17 - Prob. 32DQPCh. 17 - Prob. 34DQPCh. 17 - Prob. 35DQP
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Similar questions
- What is stratification? What are the benefits to the audit team of stratifying the sample?arrow_forwardWhich of the following factors used to determine sample size is normally based on the extentto which the audit team expects to rely on the internal control being examined?a. Allowance for sampling risk.b. Expected population deviation rate.c. Sample rate of deviation.d. Tolerable rate of deviationarrow_forwardWhat is the purpose of sampling in auditing? Why is it relevant in performing test of controls and substantive testing?arrow_forward
- Which of the following components of the audit risk model is most closely associated with attributes sampling?a. Audit risk.b. Control risk.c. Detection risk.d. Inherent risk.arrow_forwardIn determining the tolerable deviation rate for a test of controls, the auditors consider: Their planned assessed level of control risk. The sample size. The nature of the test. The expected deviation rate in the population.arrow_forwardIn determining the sample size for a test of controls, an auditor should consider the expected deviation rate, desired confidence level, and the * O Nature and cause of deviations O Population size O Risk of incorrect acceptance O Tolerable deviation ratearrow_forward
- Which of the following is the exception rate that the auditor expects to find before testing? Sample exception rate Estimated population exception rate Computed exception rate Tolerable exception ratearrow_forwardHas the validity of the CAPM been confirmed through empirical tests?arrow_forwardWhich of the following increase control risk? Select which two options are correct. Select one or more: A. Lack of segregation of duties B. Reduction in sample size for substantive tests C. Optimistic forecasts presented to analysts D. Reduction in the size of the internal audit grouparrow_forward
- The risks of incorrect acceptance in variables sampling and of overreliance in attributessampling both relate toa. Effectiveness of an audit.b. Efficiency of an audit.c. Control risk assessment decisions.d. Evidence about assertions in financial statements.arrow_forwardWhat is the formula for Audit Sampling?arrow_forwardHow do you figure out the balance of control and substantive testing? How does this link into control risk and detection risk?arrow_forward
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