Homework_4_Key - Chapter 10 Section 404 Audits of Internal...

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Chapter 10 Section 404 Audits of Internal Control and Control Risk ± Multiple Choice Questions From CPA Examinations 10-30 a. (3) b. (3) c. (4) d. (4) 10-31 a. (3) b. (2) c. (4) d. (2) 10-32 a. (3) b. (4) c. (4) d. (2) ± Discussion Questions and Problems 10-36 a. The auditor’s understanding of internal control is used in assessing control risk in the planning phase of the audit. This helps determine planned detection risk and the extent of evidence to gather on the audit engagement. b. To assess control risk below the maximum, the auditor must gain an understanding of the controls and obtain evidence of their operating effectiveness by performing tests of controls. c. In deciding whether to seek a further reduction in assessed control risk, the auditor must consider whether the controls are likely to be effective to support the reduced assessed level of control risk, and whether it would be cost-beneficial to perform additional tests of controls to support the reduced control risk assessment.
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This note was uploaded on 11/08/2009 for the course ACCTG 480 taught by Professor Wells,w during the Spring '08 term at University of Washington.

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Homework_4_Key - Chapter 10 Section 404 Audits of Internal...

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