amination - Trimester 3 2021 Trimester 3 2021 Final Onlf The auditor decides to increase the calculated level of control risk based on the results of the test of control. In order to achieve an overall audit risk level that is substantially the same as the planned audit risk level, the auditor should: ion Select one: a. Increasing materiality levels. b. Decrease the likelihood of detection. c. Increasing inherent risk. d. Substantive testing can be reduced O O A O O C OBook

amination - Trimester 3 2021 Trimester 3 2021 Final Onlf The auditor decides to increase the calculated level of control risk based on the results of the test of control. In order to achieve an overall audit risk level that is substantially the same as the planned audit risk level, the auditor should: ion Select one: a. Increasing materiality levels. b. Decrease the likelihood of detection. c. Increasing inherent risk. d. Substantive testing can be reduced O O A O O C OBook

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle.

Section: Chapter Questions

Problem 23CYBK

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Please access PCAOB Auditing Standard No. 12 "Identifying and Assessing Risks of Material Misstatements" (pcaobus.org). Use this standard to answer each of the questions below. For each answer, document the paragraph(s) in AS No. 12 supporting your answer. a. What types of information does AS No. 12 suggest the auditor should consider when obtaining an understanding of the company and its environment? b. What types of performance measurements might affect the risk of material misstatement? c. What specific issues should be included in the discussion among engagement team members regarding the risk of material misstatement? d. What factors should the auditor consider to determine if a risk is a "significant risk"? e. What guidance is provided about revising the risk assessment as the audit continues?
The following are concepts discussedin this chapter:1. Preliminary judgment about 7. Estimated total misstatementmateriality in a segment2. Control risk 8. Planned detection risk3. Risk of fraud 9. Estimate of the combined4. Inherent risk misstatement5. Risk of material misstatements 10. Acceptable audit risk6. Known misstatement 11. Performance materialitya. Identify which items are audit planning decisions requiring professional judgment.b. Identify which items are audit conclusions resulting from application of audit procedures and requiring professional judgment.c. Under what circumstances is it acceptable to change those items in part a. after theaudit is started? Which items can be changed after the audit is 95% completed?
Some audit procedures may be performed before the end of the reporting period. The more the auditor relies on the operating effectiveness of controls in the assessment of risk, the greater is the extent of the auditor’s tests of controls. Group of answer choices True, True True, False False, True False, False
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.
Henrietta Lombardi assessed control risk to be low. What is the appropriate audit strategy she should adopt? a) predominantly substantive audit approach b) control testing strategy c) combined audit strategy d) substantive year end testing
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 performed
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
Using your knowledge of the relationships among acceptable audit risk, inherent risk, control risk, planned detection risk, performance materiality, and planned evidence, state the effect on planned evidence (increase or decrease) of changing each of the following factors, while the other factors remain unchanged. an increase in acceptable audit risk ________ an increase in inherent risk ________ a decrease in control risk ________ an increase in planned detection risk ________ an increase in performance materiality ________
(c) Using your knowledge of the relationships among acceptable audit risk, inherent risk, control risk, planned detection risk, performance materiality, and planned evidence, State the effect that changing each of the following factors, while the other factors remain unchanged will have on planned work and evidence (state whether it will increase or decrease the planned audit work and evidence ) 1. an increase in acceptable audit risk 2. an increase in inherent risk 3. a decrease in control risk 4. an increase in planned detection risk 5. an increase in performance materiality
On 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.
The temporal order of an audit engagement mirrors the audit risk model. Question 39 options: True False
1. Which of the following procedures is most appropriately done if the control risk and inherent risk was assessed at a below maximum level where the management does not have effective internal controls in place? * Omit test of controls, then perform substantive testing at year-end Perform tests of controls, then perform substantive testing at year-end Perform tests of controls, then perform substantive testing at an interim period Omit test of controls, then perform substantive testing at an interim period 2. In auditing the financial statements of ESELYU Inc., the management has deliberately precluded you from gathering evidence in one of its cash accounts which you perceive to be material in regards to the audit. Which of the following audit opinion are you most likely to express? * Qualified opinion if the item is material and pervasive Unqualified Opinion if the item is material and…