AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
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Question
Chapter 9, Problem 26.2MCQ
To determine
Identify the correct answer for the given statement.
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As the acceptable level of detection risk decreases, an auditor may change the
a.
Timing of substantive tests by performing them at an interim date rather than at year-end.
b.
Assessed level of control risk.
c.
Timing of tests of controls by performing them at several dates rather than at one time.
d.
Assessed level of inherent risk to a higher amount.
e.
Nature of substantive procedures from a less effective to a more effective procedure.
As the acceptable level of detection risk decreases, an auditor may:
A. reduce substantive testing by rrelying on the assessment of inherent risk and control risk.
B. postpone the planned timing of substantive tests from interim dates to the year-end.
C.Eliminate the assessed level of inherent risk from consideration as a planning factor.
D. lower the assessed level of control risk
As the acceptable level of detection risk increases, an auditor may:
Oa. Lower the assessed level of inherent risk.
O b. Eliminate the assessed level of control risk from consideration as a planning factor.
O c. Change the planned timing of substantive tests from year-end to interim.
Od. Increase the risk of material misstatement.
Chapter 9 Solutions
AUDITING+ASSURANCE 12MONTH ACCESS CARD
Ch. 9 - Prob. 1RQCh. 9 - Prob. 2RQCh. 9 - Provide two examples of factors that might...Ch. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - Prob. 6RQCh. 9 - Prob. 7RQCh. 9 - Prob. 8RQCh. 9 - Prob. 9RQCh. 9 - Prob. 10RQ
Ch. 9 - Prob. 11RQCh. 9 - Prob. 12RQCh. 9 - Prob. 13RQCh. 9 - Prob. 14RQCh. 9 - Prob. 15RQCh. 9 - Prob. 16RQCh. 9 - Prob. 17RQCh. 9 - Prob. 18RQCh. 9 - Prob. 19RQCh. 9 - Prob. 20RQCh. 9 - Prob. 21RQCh. 9 - Prob. 22RQCh. 9 - Prob. 23RQCh. 9 - Prob. 24RQCh. 9 - Prob. 25.1MCQCh. 9 - Prob. 25.2MCQCh. 9 - Prob. 25.3MCQCh. 9 - Prob. 26.1MCQCh. 9 - Prob. 26.2MCQCh. 9 - Prob. 26.3MCQCh. 9 - Prob. 27.1MCQCh. 9 - Prob. 27.2MCQCh. 9 - Prob. 27.3MCQCh. 9 - Prob. 28.1MCQCh. 9 - Prob. 28.2MCQCh. 9 - Prob. 28.3MCQCh. 9 - Prob. 29DQPCh. 9 - Prob. 30DQPCh. 9 - Prob. 31DQPCh. 9 - Prob. 33DQPCh. 9 - Prob. 34DQPCh. 9 - Prob. 35DQPCh. 9 - Prob. 36DQPCh. 9 - Prob. 37DQPCh. 9 - Prob. 39C
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Similar questions
- On the basis of audit evidence gathered and evaluated, an auditor decides to decrease the level of detection risk from that originally planned. Assuming the same planned audit risk level, the change in the planned detection risk most likely resulted from a[n) A. Increase in the assessed control risk B.Increase in materiality levels. C. Decrease in the assessed inherent risk D.Decrease in the assessed citrol risk.arrow_forwardOn the basis of audit evidence gathered and evaluated, an auditor decides to increaseassessed control risk from that originally planned. To achieve an audit risk level (AcAR)that is substantially the same as the planned audit risk level (AAR), the auditor will(1) increase inherent risk. (3) decrease substantive testing.(2) increase materiality levels. (4) decrease planned detection risk.arrow_forwardIn response to an increased level of assessed risk of material misstatement, an auditor of anonissuer would generally A.Not make changes to the nature, timing, or extent of further audit procedures. B.Increase the emphasis on professional skepticism when gathering and evaluating auditevidence with the audit team. C.Perform more substantive audit procedures at an interim date instead of at period end. D.Perform additional tests of controls at an interim date to eliminate the need for substantivetests at period endarrow_forward
- Based on evidence gathered and evaluated, an auditor decides to increase the assessedlevel of control risk from that originally planned. To achieve an overall audit risklevel that is substantially the same as the planned audit risk level, the auditor could(1) decrease detection risk. (3) decrease substantive testing.(2) increase materiality levels. (4) increase inherent risk.arrow_forwardWhen the auditor has assessed control risk of a particular area at a reduced level, he or she will then Select one: a. eliminate the need to gather evidence in that area. b. test the effectiveness of the controls in that area. c. proceed to expand the sample sizes in that area. d. negotiate with management to determine which controls will be tested in that area.arrow_forwardWhen the risk of material misstatement due to fraud is considered high in a particular area, which of the following is a likely response? Perform tests on an interim basis throughout the period. Obtain more reliable evidence by expanding tests to include all transactions. a. b. C. d. Obtain additional corroborative information. Design tests of controls to substantiate weaknesses.arrow_forward
- Which of the following is not compatible with a high level of inherent and control risk? detection risk is low. a larger sample should be used. substantive procedures are less effective. year end tests are preferable.arrow_forwardWhy is the audit team more concerned with controlling the exposure to the risk of overreliancethan with the risk of underreliance?a. Only the risk of overreliance results in an incorrect audit decision.b. The risk of underreliance is not related to the audit team’s study and evaluation of internalcontrol.c. The risk of overreliance can ultimately result in the audit team’s failing to reduce auditrisk to acceptable levels.d. The risk of underreliance can be controlled by performing tests of controls during theinterim period.arrow_forwardIn an environment that is highly automated, an auditor determines that it is not possible toreduce detection risk solely by using substantive tests of transactions. Under these circumstances, the auditor most likely woulda. Perform tests of controls to support a lower level of assessed control risk.b. Increase the sample size to reduce sampling risk and detection risk.c. Adjust the materiality level and consider the effect on inherent risk.d. Apply analytical procedures and consider the effect on control riskarrow_forward
- If the tests of controls indicate certain controls are not as effective as the auditor originally believed, which of the following will result? Select all that apply. O increased number of substantive procedures will be planned O audit planning strategy adjusted O control risk will be increased O detection risk is increased O increased number of control tests will be performedarrow_forwardAs lower acceptable levels of both audit risk and materiality are established, theauditor should plan more work on individual accounts to(1) find smaller misstatements.(2) find larger misstatements.(3) increase the performance materiality in the accounts.(4) increase inherent risk in the accountsarrow_forwardWhich of the following is not a benefit claimed for the practice of determining materiality inthe initial planning stage of an audit?a. Being able to fine-tune the audit work for effectiveness and efficiency.b. Avoiding the problem of doing more work than necessary (overauditing).c. Being able to decide early what type of audit opinion to issue.d. Avoiding the problem of doing too little work (underauditing).arrow_forward
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