SU 8

Question 1

2 steps to access RMMs?

Answer 1

1. Evaluate the design of controls.
2. Determine if the controls have been implemented.

Question 2

What are some overall auditor responses to assessed RMMs?

Answer 2

More Professional skepticism
More supervision
More experienced staff
Greater unpredictability in further audit procedures
Changing the nature timing and extent of audit procedures

Question 3

Nature of further procedures is a function of what 2 things

Answer 3

1. purpose
2. type: type includes inspection, observations, inquiry, confirmation, recalculation, reperformance, and analytical procedures

Question 4

The choice of audit procedures depends on these 2 things

Answer 4

1. The Relevant assertions
2. The RMMs

Question 5

What is the extent of audit procedures?

Answer 5

The quantity (example-# of sampled items.) Extent increases as RMM increases.

It’s based on:
1. desired level of assurance,
2. assessed RMM,
3. materiality.

Question 6

What is dual purpose testing?

Answer 6

Test of details and test of controls

Question 7

Integrated test facility

Answer 7

Permits dummy/fictitious transactions to be processed with live transactions without the client personnel knowing.