Assessing Risk and Developing a Planned Response

Question 1

What 3 elements make up Audit Risk?

Answer 1

Inherent Risk, Control Risk & Detection Risk

Question 2

Under PCAOB, the auditor should complete final audit documentation within how many days following the report release date?

Answer 2

45 days

Question 3

Section 404 of the Sarbanes-Oxley Act requires that -

Answer 3

The audit report attest to, and report on, the internal control assessment made by management

Question 4

Materiality levels for specific transactions or account balances is known as what?

Answer 4

“Performance materiality”

Question 5

Audit risk

Answer 5

The risk that an auditor will express an opinion while there is a material misstatement in the financial statements

Question 6

Analytics are required in both the ____ stage and the _____ stage

Answer 6

Planning and Review

Question 7

Difference between SOC 1 & SOC 2?

Answer 7

SOC 1 = financial data of clients SOC 2 = cloud and data security controls

Question 8

What do walkthrough procedures generally involve?

Answer 8

Inquiry, observation, inspection of relevant documentation, and reperformance of controls

Question 9

True or False: Both substantive procedures and test of controls are required in an audit

Answer 9

TRUE

Question 10

If an auditor wishes to reduce substantive testing, he should perform what?

Answer 10

Tests of controls

Question 11

Which of the following is a complete and accurate list of the walkthrough procedures usually performed in an issuer’s integrated audit?

Answer 11

Inquiry, Observation, Inspection of relevant documentation, & reperformance of controls