Assessing and responding to risks of material misstatement, whether due to fraud or error

Question 1

Conditions and requirements of accepting and performing a compilation engagement.

Answer 1

Question 2

Steps in the audit model

Answer 2

Question 3

Auditors can respond to a heightened risk of material misstatement by

Answer 3

Decreasing materiality and reducing the acceptable lvl of detection risk

Question 4

If control risk is at maximum lvl _____

Answer 4

The auditor must document how, when, who, and what risks the assessment identified.

Question 5

How an auditor should respond to heightened assessed risk of material misstatement

Answer 5

Question 6

What is the process for understanding internal control (I/C) and assessing control risk (CR)

Answer 6

Question 7

To plan procedures for an engagement to review a nonissuers financial statements, an accountant needs to ________

Answer 7

Question 8

Compilations do not inquire regarding the _______ of the F/S, but inquire about the ________ ______ the clients select

Answer 8

do not inquire about accuracy, but about accounting principles

Question 9

Procedures performed before/after balance sheet date.

Answer 9

Question 10

Review VS Audit

Answer 10

Question 11

What is inherent risk?

Answer 11

Inherent risk is the risk that a material misstatement will occur absent any controls

Question 11

Additional testing is required when inventory is material to the FS and susceptible to misappropriation. The auditor must _______

Answer 11

-Review procedures for safeguarding inventory and perform physical inventory count on the balance sheet date or as close as possible.

Question 12

The nature, timing, and extent of substantive``` procedures reflects the amount of _________ the auditor is willing to except

Answer 12

Detection risk

Question 13

Uses of Analytical procedures

Answer 13

Question 14

What is the best method for preventing and detecting fraudulent activity?

Answer 14

Develop a fraud risk management program

Question 15

If RMM is High, than _____

Answer 15

Question 16

The auditor should make inquiries to determine the potential consequences of any deviations from prescribed control procedures

Answer 16

Auditor should report deviation or increase sample size of control tests only after determining the consequences.

Question 17

Impact of risk on audit testing

Answer 17

Question 18

Reviews vs Compilations

Answer 18

Question 19

To maintain audit risk at an acceptable level, auditors apply audit procedures to ___________

Answer 19

decrease detection risk in response to an increase in assessed control risk or inherent risk

Question 20

The RMM is a function of control and inherent risk. As RMM increase, the acceptable level of ______________

Answer 20

detection risk is increased. As RMM decreases, the acceptable level of detection risk is increased.

Question 21

What is misappropriation of assets

Answer 21

A type of fraud that includes both outright theft and the dishonest use of entity’s assets.

Question 22

Example of inherent audit risk

Answer 22

Question 23

Factors influencing interim substantive testing

Answer 23

Question 24

Role of risk assessment in integrated audits

Answer 24

Question 25

Risk Responses

Answer 25

Question 26

Auditor intends to decrease control risk

Answer 26

Question 27

What is an examination :

Answer 27

An attest engagement in which the accountant is engaged to obtain reasonable assurance about whether information measured or evaluated against certain criteria is free from material misstatement.

Question 28

If acceptable level of detection risk increases,

Answer 28

Substantive testing decreases

Question 29

Testifying as an expert witness is considered _________

Answer 29

Consulting and is governed by the statements on standards for consulting services, not SSARS.

Question 30

Audit risk model

Answer 30

Question 31

Reporting illegal acts steps

Answer 31

Question 32

Audit process (specifically obtain understanding and test of controls)

Answer 32

Question 33

Review procedures are primarily __________

Answer 33

Analyticals and inquiries

Question 34

What is channel stuffing

Answer 34

overselling so much inventory likely customer returns, necessitating allowance for sales returns

Question 35

Answer 35