EBK AUDITING+ASSURANCE SERVICES
17th Edition
ISBN: 9780135171219
Author: ARENS
Publisher: PEARSON CO
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Chapter 6, Problem 24.3MCQ
To determine
Identify the option which is correct.
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Which of the following statements best describes auditors’ responsibility for detecting a client’s noncompliance with a law or regulation?a. The responsibility for detecting noncompliance exactly parallels the responsibility for errors and fraud.b. Auditors must design tests to detect all material noncompliance that indirectly affects the financial statements.c. Auditors must design tests to obtain reasonable assurance that all noncompliance with direct material financial statement effects is detected.d. Auditors must design tests to detect all noncompliance that directly affects the financial statements.
Which of the following statements are not true about auditors responsibilities?
a) The financial statements are auditors responsibility
b) The auditor's responsibility for the audited financial statements is confined to the expression of his or her opinion on them
c) To identify and assess the risks of material mis-statement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain sufficient appropriate audit evidence to provide a basis for the auditor’s opinion
d) To obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances and for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Only a) and c)
All a) , b) , c) and d)
Only a) and d)
Only a)
Which one of the following statements is not included in the management representation letter provided to the auditor
at the end of the audit?
O It is the management’s responsibility to prepare financial statement and design and maintain effective internal
control over financial reporting.
O The management has provided all necessary information and documents to the auditor to enable the auditor to
complete the audit.
O Any remaining misstatements in the financial statements are immaterial.
O There is no material weakness in internal control over financial reporting.
Chapter 6 Solutions
EBK AUDITING+ASSURANCE SERVICES
Ch. 6 - Prob. 1RQCh. 6 - Prob. 2RQCh. 6 - Prob. 3RQCh. 6 - Prob. 4RQCh. 6 - Prob. 5RQCh. 6 - Prob. 6RQCh. 6 - Prob. 7RQCh. 6 - What are the six elements of professional...Ch. 6 - What are the five elements of an effective...Ch. 6 - Describe two of the more common judgment traps and...
Ch. 6 - Identify the cycle to which each of the following...Ch. 6 - Why are sales, sales returns and allowances, bad...Ch. 6 - Prob. 13RQCh. 6 - Prob. 14RQCh. 6 - Prob. 15RQCh. 6 - Prob. 16RQCh. 6 - Prob. 17RQCh. 6 - Prob. 18RQCh. 6 - Prob. 19RQCh. 6 - Prob. 20RQCh. 6 - Prob. 21.1MCQCh. 6 - Prob. 21.2MCQCh. 6 - Prob. 21.3MCQCh. 6 - Prob. 22.1MCQCh. 6 - Prob. 22.2MCQCh. 6 - Prob. 22.3MCQCh. 6 - Prob. 23.1MCQCh. 6 - Prob. 23.2MCQCh. 6 - Prob. 23.3MCQCh. 6 - Prob. 24.1MCQCh. 6 - Prob. 24.2MCQCh. 6 - Prob. 24.3MCQCh. 6 - Prob. 25DQPCh. 6 - Prob. 26DQPCh. 6 - Prob. 27DQPCh. 6 - Prob. 28DQPCh. 6 - Prob. 29DQPCh. 6 - Prob. 30DQPCh. 6 - Prob. 31DQPCh. 6 - Prob. 32DQPCh. 6 - Prob. 33DQPCh. 6 - Prob. 34DQP
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Similar questions
- (i) Which of the following statements correctly explains the responsibility of the external auditor?A. Responsibility to provide reasonable assurance that the financial statements are free from material error or misstatement.B. Responsibility for identifying and correcting any errors or misrepresentations in the financial statements.C. Responsibility for the reliability of the information that financial statements provide.D. Responsibility to prepare financial statements. (ii) Operational controls are designed to prevent failures in operational procedures caused by: i. Machine breakdown and human error ii. Failures in the performance of systems and weaknesses in procedures. iii. Poor management iv. Risks of errors or fraud in accounting systems and accounting and finance activities. A. i and ii onlyB. i, ii and iii onlyC. i, ii and iv onlyD. All of the above (iii) Risk tolerance refers to A. The amount of risk the company is prepared to accept in order to achieve its financial…arrow_forwardWhen auditors become aware of noncompliance with a law or regulation committed byclient personnel, the primary reason that the auditors should obtain a better understanding ofthe nature of the act is toa. Recommend remedial actions to the audit committee.b. Evaluate the effect of the noncompliance on the financial statements.c. Determine whether to contact law enforcement officials.d. Determine whether other similar acts could have occurred.arrow_forwardWhich of the following ideas is NOT included in the "Purpose" section of the Principles Underlying an Audit Conducted in Accordance with Generally Accepted Auditing Standards? The auditor must plan the audit work properly and supervise any assistants. Management, and those charged with governance, are responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework. The purpose of an audit is to provide users with an opinion on whether the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework. Management has responsibility to provide the auditor with unrestricted access to individuals within the entity from whom the auditor determines it is necessary to obtain audit evidence.arrow_forward
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