level of inherent risk extent of tests of controls level of detection risk

Level of inherent risk extent of tests of controls

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level of inherent risk. extent of tests of controls. level of detection risk. Which of the following accounts tends to be most predictable for purposes of analytical procedures? Accounts receivable Travel and entertainment expense Interest expense Income taxes payable Which of the following information that comes to an auditor's attention most likely would raise a question about the occurrence of illegal acts? The exchange of property for similar property in a nonmonetary transaction The discovery of unexplained payments made to government employees The presence of several difficult-to-audit transactions affecting expense accounts The failure to develop adequate procedures that detect unauthorized purchases Analytical procedures are most appropriate when testing which of the following types of transactions? Payroll and benefit liabilities Acquisitions and disposals of fixed assets Operating expense transactions Long-term debt transactions Which of the following would not likely be found in the minutes of the board of directors?
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Chapter 4 quiz Amount of dividends declared Approval to pledge assets as security for debts Authorization of officers' salaries Approval of a new desktop computer for the controller The type of financial analysis that expresses balance sheet accounts as percentages of total assets is known as horizontal analysis. vertical analysis. net worth analysis. expenditure analysis. Jones, CPA, is auditing the financial statements of XYZ Retailing Inc. What assurance does Jones provide that direct effect noncompliance that is material to XYZ's financial statements, and noncompliance that has a material, but indirect effect on the financial statements will be detected? Direct effect noncompliance: Reasonable; Indirect effect noncompliance: None Direct effect noncompliance: Reasonable; Indirect effect noncompliance: Reasonable Direct effect noncompliance: Limited; Indirect effect noncompliance: None Direct effect noncompliance: Limited; Indirect effect noncompliance: Reasonable Auditors would use the enterprise risk model to reduce the client's business risk. to determine detection risk. to evaluate management's risk assessment. to monitor client risk. In the planning stage, analytical procedures are used to identify potential problem areas. provide direct evidence about the balances in accounts. determine the mathematical correctness of the financial statements. perform all of these. The auditor uses the assessed level of risk of material misstatement to determine the acceptable level of detection risk for financial statement assertions. As the acceptable level of detection risk decreases, the auditor may do one or more of the following except change the nature of substantive tests to more effective procedures.
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  • Fall '14
  • Financial audit

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