AUDITING & ASSURANCE SERVICES CONNECT AC
10th Edition
ISBN: 9781259292057
Author: MESSIER
Publisher: MCG
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Question
Chapter 4, Problem 4.24P
To determine
Detection riskrefers to risk that auditor is not able to detect materially misstatement in financial statements being audited.
To calculate: Hypothetical client’s detection risk
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Chapter 4 Solutions
AUDITING & ASSURANCE SERVICES CONNECT AC
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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Similar questions
- How is the audit risk model used to plan the audit?arrow_forwardSpeculate on which type of risk creates the most uncertainty for the auditor and recommend at least two ways to plan the audit to mitigate those risks. Provide specific examples.arrow_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_forward
- 2. How do you measure risk in an audit engagement?arrow_forwardFollowing is a list of internal controls. Select the COSO component that best matches each internal control. Internal control a. Implementation of policies to reduce risk of internal control failure. b. Reporting of internal control effectiveness to investors. c. Evaluation of internal control effectiveness by external auditors. d. Identification and management of risks. COSO Control activities Information & communication Monitoring Risk assessment Control environment Assessmarrow_forwardWhen assessing the risk associated with an activity, an internal auditor should: Provide assurance on the management of the risk. Update the risk management process based on risk exposures. Determine how the risk should best be managed.arrow_forward
- Define audit risk and describe how it can be broken down into the three separate components of the audit risk model to help assess and respond to such risks during the audit planning process.arrow_forwardIn performing a risk-based audit, when developing audit recommendations, the IT auditor should: a) Use Computer Assisted Audit Techniques (CAATs) to test transactions. b) Analyze the inherent risk, residual risk, and the cost of additional controls in relation to the potential for loss. c) Determine if the risk is material based solely on auditor judgement. d) Perform substantive procedures to eliminate control riskarrow_forwardWhat are the benefits of the internal audit function establishing a risk-based plan when identifying the priorities of the internal audit activity?arrow_forward
- When testing IT controls, which of the following BEST (select one) describes the IT auditor's focus: a) Assessing the alignment of the IT controls, in relation to an industry framework. b) Assessing the design and operating effectiveness of the controls. c) Evaluating the scope and objectives of the IT controls. d) Evaluating the need for post-audit substantive testing.arrow_forwardFor risk enabled and risk managed organizations, the conclusion on risk maturity is the first step in being able to provide assurance on risk management processes, management of key risks and reporting of risks. If Panda Company used the RBIA, then: a. The actions that are being taken to add, delete or modify existing responses where they do not currently bring risk within the risk appetite b. Agree all the risk management responses and risk management processes on which objective assurance from internal audit is required c. Produce an audit plan which lists all audits to be carried out over a specified period - usually a year. d. The internal audit activity's assurance strategy is therefore to provide assurance on these areas.arrow_forwardThe audit team is currently debating whether they should be using static or dynamic reports. Which phase are they most likely in? a. Perform the Analysis b. Master the Data c. Share the story d. Ask the Questionarrow_forward
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