DECK 2

Question 1

THE RISK THAT AN AUDITOR DOES NOT IDENTIFY A MATERIAL MISTATEMENT

Answer 1

DETECTION RISK

Question 2

The nature, timing, and extent of planned substantive audit procedures for each audit area.

Answer 2

Audit program

Question 3

The relative size of financial statement misstatements that the auditor’s planned substantive audit procedures is designed to detect.

Answer 3

Planning-stage materiality

Question 4

The susceptibility of an assertion to a material misstatement, assuming that there are no related controls.

Answer 4

Inherent risk

Question 5

A material misstatement of the financial statements caused by the theft of cash receipts concealed by false entries in the accounting records.

Answer 5

Misappropriation of assets

Question 6

When an auditor increases the assessed level of control risk because certain control procedures were determined to be ineffective, the auditor would most likely increase the

Answer 6

Extent of tests of details

Question 7

a decrease in the number of misstatements in a class of transactions that an auditor could tolerate most likely would cause the auditor to

Answer 7

Perform the planned auditing procedures closer to the balance sheet date.

Question 8

if an auditor concludes that there is a high risk of material misstatement?

Answer 8

Select more effective substantive tests.

Question 9

The existence of audit risk is recognized by the statement in the auditor’s standard report that the

Answer 9

Auditor obtains reasonable assurance about whether the financial statements are free of material misstatement.

Question 10

As the acceptable level of detection risk increases, an auditor may change the

Answer 10

Timing of substantive tests from year end to an interim date.

Question 11

The acceptable level of detection risk is inversely related to the

Answer 11

Assurance provided by substantive tests.

Question 12

inherent risk is evaluated to help an auditor assess

Answer 12

The susceptibility of a financial statement assertion to a material misstatement assuming there are no related controls.

Question 13

The risk that a material misstatement will not be prevented or detected on a timely basis by the client’s internal controls.

Answer 13

control risk

Question 14

an auditor decides to increase the assessed level of control risk from that originally planned.
To achieve an overall audit risk level that is substantially the same as the planned audit risk level, the auditor would

Answer 14

Decrease detection risk

Question 15

types of risk increases when an auditor performs substantive analytical audit procedures for financial statement accounts at an interim date?

Answer 15

Detection

Question 16

As the acceptable level of detection risk decreases, an auditor may

Answer 16

Postpone the planned timing of substantive tests from interim dates to the year-end.

Question 17

Projecting an error rate by comparing the results of a statistical sample with the actual population characteristics would not be considered an

Answer 17

analytical procedure

Question 18

Projecting a deviation rate by comparing the results of a statistical sample with the actual population characteristics. is not an example of an

Answer 18

analytical control.

Question 19

tends to be most predictable for purposes of analytical procedures applied as substantive tests?

Answer 19

Relationships involving income statement accounts