Auditing A Risk Based Approach 11th Edition 2022/2
Auditing A Risk Based Approach 11th Edition 2022/2
Exam (elaborations)
Auditing A Risk Based Approach 11th Edition 2022/2023 Test Bank Chapter 1-15 Updated
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Course
Auditing A Risk Based Approach 11th Edition 2022/2
Institution
Auditing A Risk Based Approach 11th Edition 2022/2
Auditing A Risk Based Approach 11th Edition
2022/2023
Test Bank Chapter 1-15 Updated
When an auditor increases the assessed level of control risk because certain control
activities were determined to be ineffective, the auditor would most likely increase the:
a. Extent of tests of controls
b....
Auditing A Risk Based Approach 11th Edition
2022/2023
Test Bank Chapter 1-15 Updated
, When an auditor increases the assessed level of control risk because certain control
activities were determined to be ineffective, the auditor would most likely increase the:
a. Extent of tests of controls
b. Level of detection risk.
c. Extent of tests of details.
d. Level of inherent risk. - ANS✔✔--c. Extent of tests of details.
When an auditor increases the assessed level of control risk because certain control
activities were determined to be ineffective, the auditor most likely would increase the:
a. Level of inherent risk.
b. Extent of tests of controls.
c. Level of detection risk.
d. Extent of tests of details. - ANS✔✔--d. Extent of tests of details.
Choice "d" is correct. An increase in the assessed level of control risk means that the
assessed risk of material misstatement has also increased, and this requires a
corresponding decrease in detection risk to maintain the same (presumably low) level of
overall audit risk. Increasing the extent of tests of details will result in a reduction in
detection risk.
Choice "b" is incorrect. If the auditor has already determined that certain control
activities are ineffective, increasing the extent of those tests is not likely to be helpful.
The auditor needs to find a way to compensate for the increased level of risk in order to
keep overall audit risk to a low level.
An auditor assesses control risk because it:
a. Affects the level of detection risk that the auditor may accept.
b. Is relevant to the auditor's understanding of the control environment.
c. Indicates to the auditor where inherent risk may be the greatest.
d. Provides assurance that the auditor's materiality levels are appropriate. - ANS✔✔--
a. Affects the level of detection risk that the auditor may accept.
Choice "a" is correct. The auditor uses the assessed level of control risk (together with
the assessed level of inherent risk) to determine the assessed risk of material
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