Loose-leaf For Auditing & Assurance Services: A Systematic Approach
11th Edition
ISBN: 9781260687637
Author: William F Messier Jr, Steven M Glover Associate Professor, Douglas F Prawitt Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter 4, Problem 4.23P
A
To determine
Introduction: Auditing is a process wherein the auditor investigates the financial statements, data, information and other records to determine whether the financial statements show the true and fair position of the firm.
To define: Audit risk
B
To determine
Introduction: Auditing is a process wherein the auditor investigates the financial statements, data, information and other records to determine whether the financial statements show the true and fair position of the firm.
To define:The components of audit risk.
C
To determine
Introduction: Auditing is a process wherein the auditor investigates the financial statements, data, information and other records to determine whether the financial statements show the true and fair position of the firm.
To explain:The interrelation between said components.
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Students have asked these similar questions
The auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be
considered together in determining the nature, timing, and extent of auditing procedures and in evaluating the results of those
procedures.
Required:
a. Define audit risk.
b. Describe the components of audit risk (e.g., inherent risk, control risk, and detection risk).
c. Explain how these components are interrelated.
(AICPA, adapted)
The auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of auditing procedures and in evaluating the results of those procedures.
Required:
a. Define audit risk
b. Describe the components of audit risk (e.g., inherent risk, control risk, and detection risk).
c. Explain how these components are interrelated
Outline the sources of audit evidence the auditor can use as part of risk assessment procedures.
Chapter 4 Solutions
Loose-leaf For Auditing & Assurance Services: A Systematic Approach
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
Knowledge Booster
Similar questions
- Auditors need to identify audit risk in planning an audit engagement. In doing so, the audit risk model may be adopted. Require:Write the audit risk model in the two common ways it is often used by auditor. Each risk should be written in the model or named clearly for any abbreviations used.arrow_forwardWhich one of the following section of the auditor's report gives a description of an audit conducted as per ISA standards? Management's responsibility. Introductory. Basis for Opinion. Auditor's responsibility. Which one of the following statements is most appropriate to Control risk? Auditing and Cont ENarrow_forwardAudit procedures are the processes, techniques, and methods that auditors perform to obtain audit evidence, and includes: O a. Risk assessment procedures; Test of Controls; Substantive procedures O b. Test of Controls only O c. Substantive procedures & Test of controls O d. Risk assessment procedures onlyarrow_forward
- Define the term "materiality" in the context of audit reporting. What factors will influence the auditor's assessment of materiality?arrow_forwardThe auditor should consider audit risk when planning and performing an audit of financial statements. Audit risk should also be considered together in determining the nature, timing, and extent of auditing procedures and in evaluating the results of those procedures. The susceptibility of an assertion in an account or disclosure to a misstatement before consideration of any related controls Inherent risk The risk that a misstatement that could occur will not be prevented, or detected and corrected, on a timely basis by the entity’s internal control. Control risk The risk that the procedures performed by the auditor will not detect a misstatement that could be material. Detection risk c. Explain how these components are interrelated.arrow_forwardConsider the concepts of sufficient and appropriate audit evidence. Assess how audit risk relates to audit evidence. How do auditors audit accounting estimates and other subjective information? What are analytical procedures, and why are they a useful audit tool? Explain the importance of audit documentation.arrow_forward
- Direction: summarize each step of the risk-based audit process. Testing of ControlsPerforming substantive proceduresOverall review of the financial statementsIssuing audit reportarrow_forwardExplain the circumstances when an auditor needs to assess the components of the audit risk model and the effect of the assessment on the planned detection risk and planned audit evidence.arrow_forwardWhat are the components of Audit Risk? Use the Audit risk equation and briefly explain the components of audit risk.arrow_forward
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