EBK AUDITING & ASSURANCE SERVICES: A SY
11th Edition
ISBN: 9781260687668
Author: Jr
Publisher: MCGRAW-HILL LEARNING SOLN.(CC)
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Question
Chapter 3, Problem 3.24MCQ
To determine
Concept Introduction:
A tolerable misstatement is the level or amount of a misstatement which can be ignored by the auditor. There is an opposite relation between the
To choose: The correct meaning of tolerable misstatement.
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Students have asked these similar questions
In a financial statement audit, inherent risk represents
a. The risk that misstatements could occur and not be detected by the auditor's procedures.
b. The risk that misstatements could occur and not be prevented or detected by the system of internal control.
c. The risk that the auditor fails to modify materially misstated financial statements.
d. The susceptibility of an account balance to misstatement that could be material.
When auditing the accounts payable balance on the balance sheet, an auditor’s procedures most likely would focus primarily on management’s assertion of
Select one:
a. Rights and obligations
b. Completeness.
c. Existence
d. Presentation and disclosure
It refers to the risks that a material misstatement will even occur, that it would not be prevented ordetected by client internal controls, and that is not detected by the auditor’s own procedures.a. Inherent riskb. Control riskc. Detection riskd. Audit risk
Audit risk and materiality are considered at the level ofa. Overall financial statements.b. Assertions relating to individual account balance, class of transactions, or disclosure.c. Both a and b.d. Neither a nor b.
Chapter 3 Solutions
EBK AUDITING & ASSURANCE SERVICES: A SY
Ch. 3 - Prob. 3.1RQCh. 3 - Prob. 3.2RQCh. 3 - Prob. 3.3RQCh. 3 - Prob. 3.4RQCh. 3 - Prob. 3.5RQCh. 3 - Prob. 3.6RQCh. 3 - Prob. 3.7RQCh. 3 - Prob. 3.8RQCh. 3 - Prob. 3.9RQCh. 3 - Prob. 3.10RQ
Ch. 3 - Prob. 3.11RQCh. 3 - Prob. 3.12RQCh. 3 - Prob. 3.13RQCh. 3 - Prob. 3.14RQCh. 3 - Prob. 3.15RQCh. 3 - Prob. 3.16MCQCh. 3 - Prob. 3.17MCQCh. 3 - Prob. 3.18MCQCh. 3 - Prob. 3.19MCQCh. 3 - Prob. 3.20MCQCh. 3 - Prob. 3.21MCQCh. 3 - Prob. 3.22MCQCh. 3 - Prob. 3.23MCQCh. 3 - Prob. 3.24MCQCh. 3 - Prob. 3.25MCQCh. 3 - Prob. 3.26PCh. 3 - Prob. 3.27PCh. 3 - Prob. 3.28PCh. 3 - Prob. 3.29PCh. 3 - Prob. 3.30PCh. 3 - Prob. 3.31PCh. 3 - Prob. 3.32P
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Similar questions
- Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.arrow_forwardWhen performing a financial statement audit, auditors are required to explicitly assess the risk of material misstatement due to:Select one: a. Illegal acts. b. Fraud. c. Business risk. d. Errors.arrow_forwardAnalytical procedures used when planning an audit should concentrate ona. Weaknesses in the company’s internal control activities.b. Predictability of account balances based on individual significant transactions.c. Management assertions in financial statements.d. Accounts and relationships that can represent specific potential problems and risks in the financial statements.arrow_forward
- An auditor's techniques for examining the balance sheet's accounts receivable account are most likely to concentrate on management's claim ofarrow_forwardWhich is not a Risk Assessment Procedure? a. Ratio Analysis b. Observation of Activities c. Account Receivable confirmations d. Inspection of Documents e. Inquiry of Internal Auditorsarrow_forwardDefine and give examples of off-balance-sheet information. Why should auditors be concerned with such items?arrow_forward
- Auditors allocate the preliminary judgment about materiality to financial statement segments rather than to financial statements as a whole. What is the term for the auditor's allocation of preliminary misstatement to account balances? What are three difficulties auditors face when allocating materiality to balance sheet accounts?arrow_forwardthe auditor is planning to use accounts payable confirmations when auditing the client's accounts payable. The use of accounts payable confirmations will test which of the following assertions? a. rights and obligations b. existence (only) c. existence and completeness d. cutoffarrow_forwardWhich of the following statements is associated with analytical procedure test? a. It helps to identify the errors in journal and ledger. b. It helps to test the internal control system. c. It helps to study the comparison of relationships among balance sheet accounts. d. It helps to discover detailed misstatements in the financial statements.arrow_forward
- When auditing accounts receivables, auditors are usually especially concerned about the: a. Completeness and cut-off objectives. b. Existence and completeness objectives. c. Existence, realisable-value and accuracy objectives. d. Posting and summarisation objective.arrow_forwardWhen evaluating an internal control deficiency as part of a financial statement audit, the primary difference between a significant deficiency and a material weakness depends on: Multiple Choice whether there is a reasonable possibility that the company's internal control system will fail to prevent or detect and correct a misstatement of an account balance or disclosure. whether a misstatement has actually occurred as a result of the deficiency or the deficiencies. the magnitude of the potential misstatement resulting from the deficiency or the deficiencies. All of the choices are correct.arrow_forwardWhen completing the audit of internal controls for an issuer, the severity of an internal control deficiency depends ona. Whether there is a reasonable possibility that the company’s controls will fail to prevent or detect a misstatement of an account balance or disclosure.b. Whether a misstatement has actually occurred as a result of the deficiency.c. The magnitude of the potential misstatement resulting from the deficiency or the deficiencies.d. Both a and c are correct.e. All of the above are correct.arrow_forward
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