Concept explainers
a.
Introduction: Audit risk functions with risk of material misstatement and detection risk. It may occur at assertion level or financial statement level. At assertion level risk is of three types - control, inherent and detection. At financial statement level, it related to financial statements wholly or affects many assertions in the financial statements.
To find: Relationship between the level of riskiness of the client and level of misstatement in an account balance that an auditor would consider material.
b.
Introduction: Audit risk functions with risk of material misstatement and detection risk. It may occur at assertion level or financial statement level. At assertion level risk is of three types - control, inherent and detection. At financial statement level, it related to financial statements wholly or affects many assertions in the financial statements.
To find: Effect of auditor’s characteristics on professional judgments about materiality.
c.
Introduction: Audit risk functions with risk of material misstatement and detection risk. It may occur at assertion level or financial statement level. At assertion level risk is of three types - control, inherent and detection. At financial statement level, it related to financial statements wholly or affects many assertions in the financial statements.
To find: Comparison of more skeptical auditor with less skeptical auditor for making the materially judgment in part a.
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Chapter 7 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
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Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning