EBK AUDITING & ASSURANCE SERVICES: A SY
10th Edition
ISBN: 9781259293245
Author: Jr
Publisher: MCGRAW HILL BOOK COMPANY
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Question
Chapter 4, Problem 4.14MCQ
To determine
Concept Introduction:
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.
Audit risk has its three components; inherent risk, control risk, and detection risk.
To choose: The correct statement that identifies the audit risk.
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The existence of audit risk is recognized by the statement in the auditor's standard report that the auditor _______.
A. Assesses the accounting principles used and also evaluates the overall financial statement presentation.
B. Is responsible for expressing an opinion on the financial statements, which are the responsibility of management.
C. Obtains reasonable assurance about whether the financial statements are free of material misstatement.
D. Realizes that some matters, either individually or in the aggregate, are important while other matters are not important.
Management's assertions in the financial statements are of relevance to the audit process because
a. they are the procedures that will be performed by the audit team.
b. they are utilized by auditors in developing proper tests and procedures
c. they are direct evidence that management has prepared financial statements in accordance with GAAS.
d. they relate more to the audit while the financial statenent belong to the author.
all of the following are the responsibilities of the auditor except :
Select one:
a. adopting sound accounting policies, maintaining adequate internal control, and making fair representations in the financial statements
b. making certain that all the assertions in the financial statement are correct
c. report on the financial statements, and communicate as required by auditing standards, in accordance with the auditor’s findings
d. obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement
Chapter 4 Solutions
EBK AUDITING & ASSURANCE SERVICES: A SY
Ch. 4 - Prob. 4.1RQCh. 4 - Prob. 4.2RQCh. 4 - Prob. 4.3RQCh. 4 - Prob. 4.4RQCh. 4 - Prob. 4.5RQCh. 4 - Prob. 4.6RQCh. 4 - Prob. 4.7RQCh. 4 - Prob. 4.8RQCh. 4 - Prob. 4.9RQCh. 4 - Prob. 4.10RQ
Ch. 4 - Prob. 4.11RQCh. 4 - Prob. 4.12RQCh. 4 - Prob. 4.13MCQCh. 4 - Prob. 4.14MCQCh. 4 - Prob. 4.15MCQCh. 4 - Prob. 4.16MCQCh. 4 - Prob. 4.17MCQCh. 4 - Prob. 4.18MCQCh. 4 - Prob. 4.19MCQCh. 4 - Prob. 4.20MCQCh. 4 - Prob. 4.21MCQCh. 4 - Prob. 4.22MCQCh. 4 - Prob. 4.23PCh. 4 - Prob. 4.24PCh. 4 - Prob. 4.25PCh. 4 - Prob. 4.26PCh. 4 - Prob. 4.27PCh. 4 - Prob. 4.28PCh. 4 - Prob. 4.29PCh. 4 - Prob. 4.30PCh. 4 - Prob. 4.31PCh. 4 - Prob. 4.32P
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- In a financial statement audit, the auditor obtains a reasonable level of assurance about whether the financial statements are free of material misstatement in order to express an opinion. In order to obtain reasonable assurance, the auditor must have prior experience in the industry in which the audit client operates. examine all documents available that support the financial statements. obtain sufficient audit evidence. test controls around significant transaction cycles.arrow_forwardKA In order to form an opinion, the auditor shall conclude as to whether the auditor has obtained reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error. The conclusion should consider and take into account: answer the below in essay form The evaluation of the financial statements as a whole should include what other significant elements and requirements are needed to formulate an auditor's report.arrow_forwardIn including an audit of financial statements , the overall objectives are the following, EXCEPT A. To conduct a critical, detailed and systematic examination of all the account balances in the financial statements, as the related document records , procedures and controls B. To obtain reasonable assurance whether financial statement as a whole are free from material misstatement whether du to fraud or error C. To report on the financial statements and communicate as required by the PSAs in accordance with the auditor’s findings D. To enable the auditor to express an opinion on whether the financial statements are prepared, in all material respects in accordance with the applicable financial reporting frameworkarrow_forward
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