D assessing the adequacy of the available evidential

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D. Assessing the adequacy of the available evidential matter. 58. Which of the following auditing procedures most likely would assist an auditor in identifying related party transactions? A. Inspecting correspondence with lawyers for evidence of unreported contingent liabilities. B. Vouching accounting records for recurring transactions recorded just after the balance sheet date. C. Reviewing confirmations of loans receivable and payable for indications of guarantees. D. Performing analytical procedures for indications of possible financial difficulties. 59. If the results of the auditor’s expert’s work do not provide sufficient appropriate audit evidence or are not consistent with other audit evidence, the auditor should A. Report the matter to the appropriate regulatory agency of the government. B. Resolve the matter. C. Withdraw from the engagement. D. Express an unqualified opinion with reference to the work of the expert. RISK ASSESSMENTS AND INTERNAL CONTROL
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60. A measure of how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed and an unmodified opinion has been issued is the A. Inherent risk. B. Acceptable audit risk. C. Control risk. D. Detection risk. 61. Which of the following is not one of the three primary objectives of effective internal control? A. Reliability of financial reporting. B. Efficiency and effectiveness of operations. C. Compliance with laws and regulations. D. Assurance of elimination of business risk. 62. Which of the following should be considered control environment elements? A. Detection risk B. Commitment to competence, detection risk and organizational structure C. Commitment to competence and organizational structure D. Organizational structure Page 11 63. Which of the following statements concerning the relevance of various types of controls to a financial statement audit is correct? A. All controls are ordinarily relevant to a financial statement audit. B. Controls over safeguarding of assets and liabilities are of primary importance, while controls over the reliability of financial reporting may also be relevant. C. Controls over the reliability of financial reporting are ordinarily most directly relevant to a financial statement audit, but other controls may also be relevant. D. An auditor may ordinarily ignore a consideration of controls when a substantive audit approach is taken. 64. An auditor should consider two key issues when obtaining an understanding of a client’s internal controls. These issues are A. The effectiveness and efficiency of the controls. B. The frequency and effectiveness of the controls. C. The design and implementation of the controls. D. The implementation and efficiency of the controls. 65. Authorizations can be either general or specific. Which of the following is not an example of a general authorization?
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