AUDITING+ASSURANCE 12MONTH ACCESS CARD
17th Edition
ISBN: 9780135635131
Author: ARENS
Publisher: WILEY
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Chapter 9, Problem 6RQ
To determine
Identify the individual who should make inquiries as a part of risk assessment procedures and state the manner in which the individuals might be helpful in assessing risks of material misstatement.
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In making client acceptance and continuance decisions, the auditor will perform various procedures in assessing the client. Which of these would most likely not be one of those procedures?
a. obtain background checks on management to assess management integrity
b. review regulatory filings and examination reports
c. analyze client financial statements and compare to industry metrics
d. submit management to a lie detector test
Discuss the implications of material errors on financial statements and the potential consequences for an organization. How can these errors affect the organization's reputation and stakeholders' trust?
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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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- What possible actions would an auditor might take if a client’s financial statements depart from GAAP. Would the demand for assurance services increase or decrease in the future?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_forwardWhich one of the following components of internal control over financial reporting sets the tone for the organization? a. Risk assessment. b. Control environment. c. Information and communication. d. Monitoring.arrow_forward
- Professional guidance indicates that the auditor should consider revenue recognition to be high risk in planning an audit of a company’s financial statements. a. Identify the activities that affect the revenue cycle. b. Identify the financial statement accounts typically associated with the revenue cycle.arrow_forwardWhich of the following are true regarding internal auditors and the adequacy of an organization's risk management process 1. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management's risk processes the same way they analyze risk when planning an engagement O I II, III and IV O None of the choices O , Il and III only O l and Il onlyarrow_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
- Provide the key factor auditors will have to review when deciding on the inherent risk within the accounting system.arrow_forwardWhich of the following are true regarding internal auditors and the adequacy of an organization's risk management process I. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level'of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management's risk processes the same way they analyze risk when planning an engagement O , II, III and IV O None of the choices OI, Il and III only O l and II only O l and III onlyarrow_forwardWhich of the following are true regarding internal auditors and the adequacy of an organization’s risk management process: I. Internal auditors must understand the risk assessment process and the tools used to make the assessment II. Internal auditors should determine the level of risks acceptable to the organization III. Internal auditors need to be satisfied that the key objectives of risk management processes are being met IV. Internal auditors should evaluate management’s risk processes the same way they analyze risk when planning an engagement Choices: a. I and III only b. I and II only c. None of the choices d. I, II, III and IV e. I, II and III onlyarrow_forward
- You have been approached by the financial institutions DatabankFinancial Services Limited and Blackstar holdings limited to be theirauditors.a. Iterate the factors that can heighten ‘engagement risk’ as auditorsfor either of this companies and what kind of information youwill require to guide your decision.b. Assuming you consider a risk-based strategy as an effective auditstrategy for executing your mandate, what are the probable areasof risk you will focus on and how will you test for them?arrow_forwardIdentify how each of the following statements relates to the performance principle by considering which element(s) of the principle are related to that statement. (A statement may be related to more than one element.) Use the following elements in providing your response: Reasonable assurance • Planning and supervision • Materiality ⚫ Risk assessment • Audit evidence a. Evaluating the effectiveness of the client's internal control in preventing or detecting misstatements. b. Obtaining an understanding of the client's business and industry. c. Acknowledging that the risk of failing to detect a material misstatement cannot be reduced to zero. d. Obtaining confirmations from the client's customers as to the ending balances in accounts receivable. e. Preparing a written audit plan. f. Designing audit procedures to identify misstatements that would have a significant effect on financial statement users' decisions. g. Considering the likelihood that the account balance contains a material…arrow_forwardDescribe and define the assertions that management makes about the recognition, measurement, presentation, and disclosure of the financial statements and explain why auditors use them as the focal point of theaudit.arrow_forward
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