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Questions and Answers
Is audit risk the possibility that auditors fail to modify their opinion on FS that are not materially misstated?
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?
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?
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?
Can detection risk be controlled by the auditor?
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After determining the desired audit risk, should the auditor design more effective substantive procedures as the desired level of audit risk decreases?
After determining the desired audit risk, should the auditor design more effective substantive procedures as the desired level of audit risk decreases?
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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.
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.
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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 or false: Inherent risk is the risk that a material misstatement could occur in an FS assertion assuming there are no related internal controls.
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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.
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.
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True or false: Detection risk can be increased or decreased by the auditor and is looked at as the component of ST.
True or false: Detection risk can be increased or decreased by the auditor and is looked at as the component of ST.
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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 or false: Only the detection risk can be controlled by the auditor and the auditor can only assess the inherent and control risk.
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