Upgrade to remove ads Show Only A$47.99/year
Terms in this set (67)Auditors should perform audits to reduce ______ risk to a sufficiently low level before expressing an opinion on the financial statements. Audit True or false: Consideration of audit risk at the financial statement level is referred to by the term assertion. False The risk that the auditor will not discover a material misstatement in the financial statements is known as ______ risk Detection The susceptibility of a material account or disclosure assertion to a misstatement due to fraud or error, before considerations of any related controls is _____ risk Inherent he risk that a material account or disclosure assertion will not be prevented, detected or corrected on a timely basis by the entity's internal control is____ risk control The risk that the auditor expresses an inappropriate audit opinion when the financial statements are materially misstated is known as ______ risk. audit The risk of material misstatement is also referred to as____ risk because it stems from decisions made by the entity Client Consideration of audit risk at the account balance and disclosure levels is known by the term____ assertion The auditor can manipulate ______ risk by changing the scope of the auditor's test procedures. detection The risk that the procedures performed by the auditor to reduce audit risk to an acceptably low level will not detect a misstatement that exists exists is known as ______ risk. detection The susceptibility of an assertion in an account or disclosure to a misstatement due to error or fraud that could be material is known as ______ risk. Inherent Audit evidence is subject to human error which is referred to as____risk nonsampling The risk that a misstatement could occur in an assertion and would not be prevented, or detected and corrected, on a timely basis by the entity's internal control is known as ______ risk. control If inherent and control risks are high, in order to achieve the planned level of audit risk, the auditor will ______ level of detection risk. set a lower The combination of inherent risk and control risk is referred to in auditing standards as the risk of material misstatement The use of the audit risk model ______. assists the auditor in determining the scope of audit procedures If the achieved level of audit risk is greater than the planned level, auditor options include ______. modifying the audit
opinion he effectiveness of the audit procedures and how well the procedures are applied by the auditor determines the____ risk detection The risk that the auditor is exposed to financial loss or damage to their professional reputation in connection with the audited financial statements is known as ______. engagement True or false: Professional skepticism is not a way to reduce judgment errors. False True or false: Detection risk has an inverse relationship to inherent and control risk. True Substantive audit procedures that will reduce audit risk to an acceptably low level are designed using the planned level of____ risk detection The formula for the audit risk model is ______. AR = RMM x DR Auditing standards state that audit risk must be reduced to at least a ______ level. low True or false: At the completion of the audit, the actual or achieved level of audit risk is known with certainty by the auditor. False Although some control can be exercised through the careful acceptance and continuance of clients_____Risk cannot be directly controlled by the auditor. engagement When both audit risk and the risk of material misstatement are low, detection risk will be ______. high Identify the three steps involved in the auditor's use of the audit risk model at the assertion level. ... Many public accounting firms find it appropriate to use ______ in the audit risk model. qualitative terms Business risk ______. an adversely affect an entity's ability to execute its strategies Market-share growth and excellent service and reputation are examples of business objective When compared to a high level of detection risk, a low level of detection risk implies that the investigation of an account will be ______ thorough. high Which of the following statements is correct? Those charged with governance of the entity may be useful in providing information to the auditor. Threats from significant events that could adversely affect an entity's ability to achieve its objectives and execute its strategies are business risks Being the low-cost or high-quality provider of a product are examples of business strategy To obtain information about an entity and its environment, auditors may make inquires of ______. Internal auditors True or false: Inquiries of others outside the entity may provide information that assists the auditor in uncovering fraud. True e formula auditors use to determine the appropriate level of detection risk is ______. DR = AR/RMM Evaluations of financial information made through the study of plausible relationships among both financial and non-financial data are referred to as Analytical procedures Who addresses business risks by implementing a risk assessment process? Management Observation and inspection audit procedures include ______.
tracing transactions through the information system he risk of material misstatement refers to misstatements caused by_____ or _____ error or fraud An auditor makes inquiries of an entity's customers and discovers the customers received large quantities of unordered products just before year-end. This is an indicator of ______. overstated revenues The auditor should obtain information about the conduct of operations, joint ventures, planned acquisitions, and major subsidiaries as part of learning about the ______. nature of the entity The auditor should develop expectation about plausible relationships that are expected to exist when performing preliminary analytical procedures True or false: Observation and inspection audit procedures should be limited to current activities performed inside the organization. False being the low-cost or high-quality provider of a product are examples of business strategies Auditors assess the risk of material misstatement at the ______ level. assertion Internal performance measures include ______. both financial and nonfinancial indicators To understand the nature of the entity, auditors should obtain information about the entity's: ______. investments An active and qualified board of directors, proper authorization of transactions and procedures to ensure assets exist are all examples that may be part of an entity's internal control The PCAOB states that, as a part of understanding the entity, auditors should consider ______. obtaining information about significant unusual developments regarding trading activity in the company's securities To help understand the entity and identify the risks of material misstatements, the auditor should consider____and other external factors industry, regulatory If an entity's response to identified risks is adequate, the risk of material misstatement may be ______ reduced The entity's policies and procedures designed to provide reasonable assurance about the achievement of the entity's objectives is labeled internal control Unintentional misstatements of amounts or disclosures in financial statements are referred to as error If an entity's response to identified risks are inadequate, the auditor's assessment of the risk of____ ____ may increase materiala misstatement Examples of misappropriation of assets include: stealing physical assets and intellectual property An intentional act involving the use of deception that results in an misstatement in the financial statements is referred to as fraud An auditor tests an invoice for services provided and determines that the amount charged is incorrect. This is an example of a ______ misstatement. factual When an auditor considers management's selection of an accounting policy to be inappropriate, a(n)___ ____ misstatement arisses judgemental Misstatements arising from the misappropriation of assets is sometimes referred to as defalcation Misstatements due to error or fraud include ______. omission of a disclosure Examples of misappropriation of assets include ______. using an entity's assets for personal use Risk factors relating to attitudes/rationalizations to report fraudulently include ______. board members alleging fraud Risk factors relating to incentives/pressures to report fraudulently include ______. need to obtain debt or equity financing Risk factors relating to opportunities to report fraudulently include ______. significant related party
transactions Sets with similar termsAudit Risk Flashcards - Chapter 425 terms nathan_davis Audit Chapter 434 terms jessica_vance8 Audit chapter 942 terms efait Audit Chapter 942 terms vsireci Sets found in the same folderChapter 4 audit60 terms Thong_Nguyen347 Chapter 290 terms arisve_ordaz Chapter 6147 terms holly_zhen AC 523 Ch. 3 Questions82 terms justjess13 Other sets by this creatorHW 14 351020 terms audra_richards HW 13 351020 terms audra_richards HW 12 351020 terms audra_richards HW 11 351020 terms audra_richards Recommended textbook solutions Human Resource Management15th EditionJohn David Jackson, Patricia Meglich, Robert Mathis, Sean Valentine 249 solutions Service Management: Operations, Strategy, and Information Technology7th EditionJames Fitzsimmons, Mona Fitzsimmons 103 solutions
Information Technology Project Management: Providing Measurable Organizational Value5th EditionJack T. Marchewka 346 solutions Service Management: Operations, Strategy, and Information Technology7th EditionJames Fitzsimmons, Mona Fitzsimmons 103 solutions Other Quizlet setsANS 110 exam 238 terms jaworskialeah International Relations Final28 terms blevine11 CNS Review: Anatomy and Physiology 140 terms Jm002002 Chapter 8 Part 317 terms ubrooks2708PLUS Related questionsQUESTION 47) One way to depict the pay rate ranges for each pay grade is with a wage structure graphically depicting the: 2 answers QUESTION A board composed primarily of outside directors will have better insights as to the firms intended strategic initiatives, the reasons for the initiatives, and the outcomes expected from them than will inside directors. 7 answers QUESTION Which is true regarding enterprise resource planning (ERP)? 3 answers QUESTION A consistent nationwide template to enable federal, state, local, tribal, private sector, and nongovernmental organizations to work together effectively and efficiently to prepare for, prevent, respond to, and recover from domestic incidents regardless of size or complexity best defines: 2 answers What is credibility in auditing?Auditing credibility is a process where you check whether the information provided by a source is reliable. This includes checking if the person providing the information has the necessary skills and training to provide accurate information.
How does audit add credibility?Independent auditing firms provide credibility to financial statements by examining the evidence that underlies the information provided and then reporting on those findings.
How can auditors reduce risk?How can an auditor reduce audit risk?. Perform proper audit planning before executing audit procedures.. Design suitable audit procedures that respond to the assessed risk.. Properly allocate staff based on their skills and experiences.. Have proper monitoring and supervision of audit work.. Does audit reduce the information risk?Auditing has no effect on either the risk-free interest rate or business risk. However, auditing can significantly reduce information risk. The four primary causes of information risk are remoteness of information, biases and motives of the provider, voluminous data, and the existence of complex exchange transactions.
|
The credibility added by auditors reduces ______ risk.
Postagens relacionadas
direito autoral © 2024 toptenid.com Inc.
