Identify the major causes of information risk and identify the three main ways
information risk can be reduced. What are the advantages and disadvantages of each?
The four primary causes of information risk are remoteness of information,
In the conduct of audits of financial statements, it would be a serious breach of
responsibility if the auditor did not thoroughly understand accounting.
However, many competent accountants do not have an understanding of the auditing
Distinguish among the following three risks: risk-free interest rate, business risk, and
information risk. Which one or ones does the auditor reduce by per-forming an audit?
Risk-free interest rate This is approximately the rate the b
What are the differences and similarities in audits of financial statements, compliance
audits, and operational audits?
To determine whe
Discuss the major factors in today's society that have made the need for independent
audits much greater than it was 50 years ago.
An independent audit is a means of satisfying the need for reliable information on the
part of decision ma
Describe the nature of the evidence the internal revenue agent will use in the audit of
Jones Company's tax return.
The primary evidence the internal revenue agent will use in the audit of the Jones
Company's tax return include all avail
What knowledge does the auditor need about the client's business in an audit of historical
financial statements? Explain how this knowledge may be useful in performing other
assurance or consulting services for the client.
List five examples of specific operational audits that can be conducted by an internal
auditor in a manufacturing company.
Five examples of specific operational audits that could be conducted by an internal
auditor in a manufacturing com
Explain the relationships among audit services, attestation services, and assurance
services, and give examples of each.
The relationship among audit services, attestation services, and assurance services is
reflected in Figure. An assur
Explain what is meant by determining the degree of correspondence between information
and established criteria. What are the information and established criteria for the audit of
Jones Company's tax return by an internal revenue agent? What are