It refers to the risk that the financial statements

118. It refers to the risk that the financial statements are materially misstated prior to audit.
It consists of two components: inherent and control risk.

119. A CPA should maintain objectivity and be free of conflicts of interest when performing:
120. It is a function of the risks of material misstatement and detection risk. 121. Which of the following types of employees must be independent of an audit client?
a. Senior auditors assigned to the office that performs the audit.
b. A partner in the office that performs the engagement.
c. All firm professionals, regardless of their position.
d. Managers assigned to an office that does not participate in the engagement.
123. Suitable criteria as an element of assurance engagements includes the following:
(multiple answers allowed)
124. Try to pair the ‘nature of service’ and the level of assurance provided by the auditor. Audit 125. The purpose of this type of audit is to detect a deter fraudulent activities 126. Sufficient appropriate evidence under the reasonable assurance engagements is obtained
as part of a systematic engagement process that includes the following, except:
a. Describing the engagement circumstances and the form of conclusion
b. Evaluating the evidence obtained
c. Responding to the assessed risk
d. Obtaining understanding of the engagement circumstances