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Exam 13: Overall Audit Plan and Audit Program

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Question 41

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When testing details of balances, most audit procedures satisfy only one balance-related objective, but more than one audit procedure should be used to test each objective.

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Question 42

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If inherent risk is increased to medium from low, tests of details of balances can be reduced.

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Question 43

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Shown below (1 through 5) are the five types of tests which auditors use to determine whether financial statements are fairly stated. Which three are substantive tests? 1) risk assessment procedures 2) tests of controls 3) tests of transactions 4) analytical procedures 5) tests of details of balances

Tests of controls are directed toward the control's:

Which of the following is ordinarily designed to detect material dollar errors on the financial statements?

Which of the following is not a valid basis for omitting an audit test in forming an opinion on the clients financial statements?

Three factors the auditor considers when assessing control risk are: the auditor's belief concerning the effectiveness of internal controls, the results of tests of controls, and the cost-effectiveness of a reduced assessed control risk. Identify the combination of conditions for these three factors that is required before a reduction in substantive testing is permitted.

Tests of controls provide evidence about the likelihood for misstatements in a client's financial statements.

When analytical procedures are performed during substantive testing, they are typically more focused and extensive than when performed as part of audit planning.

Analytical procedures are the least costly type of audit test.

The auditor would design which of the following audit tests to detect possible monetary errors in the financial statements?

Tests of controls and substantive tests of transactions are an important determinant of the extent of the auditor's use of tests of details of balances. Which of the following is true?

An increased extent of tests of controls is most likely to occur when:

Auditing standards require that tests of controls be performed on every audit engagement.

Which of the following would not be considered further audit procedures?

What type of test is used to obtain more types of evidence than any other?

The auditor must communicate significant deficiencies in internal control only after the entire audit is complete to ensure the auditor has a sufficient understanding of the circumstances surrounding the deficiency.

Which of the following types of procedures will be performed in an audit of internal control over financial reporting?

Risk assessment procedures are performed by auditors during an audit in order to:

When controls are deemed ineffective and assessed control risk is at the maximum for a private company, which of the following would normally be true?