10 Questions
Is audit risk the possibility that auditors fail to modify their opinion on FS that are materially misstated?
True
Inherent risk refers to the risk that a material misstatement could occur in a FS assertion and not be prevented or detected by the client's internal controls?
False
Detection risk is the susceptibility of FS assertion to a material misstatement, assuming there are no related internal controls?
False
If the desired level of audit risk decreases, the auditor should design less effective substantive procedures?
False
Detection risk can be increased or decreased by the auditor, while inherent and control risk can only be assessed by the auditor?
True
True or false: Audit risk refers to the possibility that the auditors fail to appropriately modify their opinion on FS that are materially misstated?
True
True or false: Control risk is the risk that a material misstatement could occur in a FS assertion and not be prevented or detected by the client's internal controls?
True
True or false: Detection risk can be controlled by the auditor, while inherent and control risk can only be assessed by the auditor?
False
True or false: In order to control detection risk, the auditor should perform more effective substantive procedures and year-end procedures?
True
True or false: If the desired level of audit risk decreases, the auditor should design more effective substantive procedures?
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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