Assertions about classes of transactions and events typically include
-completeness, accuracy, and valuation
-existence, rights, and cutoff
-existence, rights, and obligations
-occurrence, cutoff, and completeness
Assertions about account balances at year-end typically include _______.
-existence, occurrence, and cutoff
-existence, completeness, and allocation
-existence, completeness, and rights and obligations
-accuracy, valuation, and occurrence
Assertions about presentation and disclosure typically include _______.
-cutoff, presentation, and disclosure
-completeness, accuracy and valuation, and classification and understandability
-cutoff, accuracy, and valuation
-existence, rights and obligations, and cutoff
If the auditor determines that internal controls are not functioning as designed, and a compensating control does not exist, the auditor will assess control risk and the risk of material misstatement (RMM) as_______.
-low and set detection risk as high
-low and set detection risk as low
-high and set detection risk as high
-high and set detection risk as low
If significant fraud risk exists, the auditors should _______.
-plan to place greater reliance on the internal audit function
-be able to place greater reliance on management assertions
-respond by including elements of predictability in their audit plan
-respond by including elements of unpredictability in their audit plan
For clients with multiple locations, the auditors_______.
-could not vary which locations are tested each year, but instead vary the type of audit procedures that are performed at the different locations
-should always hire another auditor to check other locations, and not attempt to do this themselves
-could vary which locations are tested each year and the type of audit procedures that are performed at the different locations
-could vary which locations are tested each year and not change the type of audit procedures that are performed at the different locations
When analytical procedures are used to obtain audit evidence during the risk response phase, _______.
-they are referred to as tests of internal control
-the audit report is ready to be issued
-they are referred to as "substantive analytical procedures."
-management should be allowed to select the procedures and tests
Every audit will involve _______.
-conflicts with management pertaining to estimates
-some amount of substantive testing because audit standards require it for relevant assertions
-relying on the internal audit function for production of evidentiary matter
-no substantive testing because audit standards require it not to be conducted for relevant assertions
A dual-purpose test _______.
-involves satisfying informational requests from management and the client's legal counsel simultaneously
-involves the auditor being able to bill the client for two tests when only one was performed
-involves the auditors designing a test of controls and a substantive test of details to be performed at the same time on the same transaction
-involves the auditors designing a test of controls and a substantive test of details to be performed at the same time on different transactions
Some substantive procedures can only be performed at year-end _______.
-once the internal audit function has completed its preliminary testing of the account
-due to the nature of the assertion or the timing of the transactions
-due to management not allowing the auditors access beforehand
-because there have been no transactions occurring in these accounts during the year
Question 29 Occurrence, cutoff, and completeness Question 30 Existence, completeness, and rights and obligations Question 31... View the full answer