10 Questions
Is audit risk the possibility that auditors fail to modify their opinion on FS that are not materially misstated?
False
Does audit risk consist of the possibility of a material misstatement in an assertion about an FS account and the auditors fail to detect the misstatement?
True
Is inherent risk the risk that a material misstatement could occur in an FS assertion but be prevented or detected by the client's internal controls?
False
Can detection risk be controlled by the auditor?
True
After determining the desired audit risk, should the auditor design more effective substantive procedures as the desired level of audit risk decreases?
True
True or false: Audit risk refers to the possibility that the auditors fail to appropriately modify their opinion on FS that are not materially misstated.
False
True or false: Inherent risk is the risk that a material misstatement could occur in an FS assertion assuming there are no related internal controls.
True
True or false: Control risk is the risk that the auditor's procedures will not detect a material misstatement that exists in a FS assertion.
False
True or false: Detection risk can be increased or decreased by the auditor and is looked at as the component of ST.
True
True or false: Only the detection risk can be controlled by the auditor and the auditor can only assess the inherent and control risk.
True
Test your knowledge of audit risk with this quiz! Learn about the different types of audit risk, including inherent risk, control risk, and detection risk. Understand how auditors assess and mitigate these risks to ensure accurate financial statements. This quiz is perfect for accounting and auditing students or professionals looking to brush up on their knowledge of audit risk.
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