Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN: 9781305080577
Author: Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher: South-Western College Pub
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Question
Chapter 7, Problem 5TFQ
To determine
Introduction: Inherent risks are the risks due to factors which are beyond the internal control of the organization. These risks arise in situations where there is a lot of subjectivity, judgment and estimation. Hence, inherent risks include factors which could threaten the fundamental financial viability of the organization.
To choose: Whether the statement is true or false.
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Students have asked these similar questions
Do you think the concept of materiality is incompatible with ethical behavior? Consider in your answer how materiality judgments affect risk assessment in an audit of financial statements.
Prudential regulation is generally seen to deal with:
a.
Systematic risks in the financial sector.
b.
The inherent risks of the profit seeking motive of a Financial Institution.
c.
Prudential breaches by the Financial Institution.
d.
The systemic risks that a Financial Institution can pose if its failure can easily lead to the failure of other financial institutions.
Which of the following does NOT describe substantive procedures?
O includes inspection, inquiry, and confirmation
O also known as substantive testing or tests of details
O influenced by the overall risk assessment
O designed to obtain indirect evidence of information included in the financial statements
Chapter 7 Solutions
Auditing: A Risk Based-Approach to Conducting a Quality Audit
Ch. 7 - Prob. 1TFQCh. 7 - Prob. 2TFQCh. 7 - Prob. 3TFQCh. 7 - Prob. 4TFQCh. 7 - Prob. 5TFQCh. 7 - Prob. 6TFQCh. 7 - Prob. 7TFQCh. 7 - Prob. 8TFQCh. 7 - Prob. 9TFQCh. 7 - Prob. 10TFQ
Ch. 7 - Prob. 11TFQCh. 7 - Prob. 12TFQCh. 7 - Prob. 13TFQCh. 7 - In terms of the timing of the risk response, the...Ch. 7 - Prob. 15MCQCh. 7 - Prob. 16MCQCh. 7 - Prob. 17MCQCh. 7 - Prob. 18MCQCh. 7 - Prob. 19MCQCh. 7 - Prob. 20MCQCh. 7 - Prob. 21MCQCh. 7 - Prob. 22MCQCh. 7 - Prob. 23MCQCh. 7 - Prob. 24MCQCh. 7 - Prob. 25MCQCh. 7 - Prob. 26MCQCh. 7 - Prob. 27MCQCh. 7 - Prob. 28MCQCh. 7 - Prob. 29RSCQCh. 7 - Prob. 30RSCQCh. 7 - Define the following terms: (a) performance...Ch. 7 - Prob. 32RSCQCh. 7 - Prob. 34RSCQCh. 7 - Prob. 35RSCQCh. 7 - Prob. 36RSCQCh. 7 - How does inherent risk relate to internal...Ch. 7 - Prob. 38RSCQCh. 7 - Prob. 39RSCQCh. 7 - Prob. 40RSCQCh. 7 - Prob. 43RSCQCh. 7 - Prob. 45RSCQCh. 7 - Prob. 46RSCQCh. 7 - Prob. 47RSCQCh. 7 - Prob. 48RSCQCh. 7 - Prob. 49RSCQCh. 7 - Prob. 52RSCQCh. 7 - Prob. 53RSCQCh. 7 - Prob. 54RSCQCh. 7 - Prob. 55RSCQCh. 7 - Prob. 56RSCQCh. 7 - Prob. 57RSCQCh. 7 - Prob. 58FF
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Similar questions
- what are the benefit to the financial institution and their consumers of measuring or mitigating against risks.arrow_forwardWhich of the following is the best description of reliability in relation to information in financial statements? Comprehensibility to users Influence on the economic decisions Freedom from material error and bias Inclusion of degree of caution of usersarrow_forwardHow can we reduce this risk in financial reporting process? "Are redundant and out-of-date information flows identified and terminated?"arrow_forward
- Whether the act of overstating in revenue is considered and classified to be asignificant risk. Does this risk can be charged with governance?arrow_forwardDuring financial statement audit, auditors seek to restrict which type of risk? Control risk, Detection risk, Inherent risk, or Account riskarrow_forwardDoes a qualified opinion on management’s assessment of internal controls over the financial reporting system necessitate a qualified opinion on the financial statements? Explain.arrow_forward
- In finance, the term risk management involves identifying the potential risks the organization may face in the future, analyze the impact of the risk and implement measures so that either is absolved or its adverse impact is minimized. Content analysis: a. discuss the categories of risks in financial institutions.arrow_forwardSomething is deemed to be 'material' if its omission, non-disclosure or misstatement is likely to affect economic decisions or other evaluations made by users entitled to rely on the financial statements. Select one alternative: True Falsearrow_forwardhow the following financial risks can be mitigated and managed by the financial institutions market risk operational risk credit risk Liquidity risk Insolvency riskarrow_forward
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