Audit Procedures and Evidence

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What responds to risk assessment for each significant account and assertion?

RMM

Nature & Timing (correct)

Audit Risk Model

Extent

Which factor has an inverse relationship with Detection Risk (DR)?

Inherent Risk (IR)

Risk of Material Misstatement (RMM) (correct)

Extent

Control Risk (CR)

What happens to the amount of substantive testing required as the Risk of Material Misstatement (RMM) increases?

It is not affected

It remains the same

It decreases

It increases (correct)

In the Audit Risk Model, which factors make up the Risk of Material Misstatement (RMM)?

IR x CR Signup and view all the answers

What should the auditor do to obtain sufficient appropriate audit evidence?

Design and perform audit procedures Signup and view all the answers

What is the purpose of substantive audit procedures?

To detect material misstatements at the assertion level. Signup and view all the answers

Which assertion is related to the completeness assertion for transactions?

Cut-off Signup and view all the answers

What do tests of details aim to verify?

The correctness of transactions. Signup and view all the answers

Which assertion is related to the accuracy, valuation, and allocation for account balances?

Classification Signup and view all the answers

What is the main focus of risk assessment in relation to substantive audit procedures?

Determining the degree of focus for substantive procedures. Signup and view all the answers

In relation to substantive audit procedures, what is the purpose of vouching?

To trace transactions back to supporting documentation. Signup and view all the answers

What is the main focus of Analytical Procedures in auditing?

Finding underlying non-financial information Signup and view all the answers

When are Computer Assisted Audit Techniques (CAATS) and Automated Data Analysis (ADAs) more useful?

When internal controls are strong Signup and view all the answers

In auditing, what does CAS 540 require regarding the audit of estimates?

Test management's estimation process Signup and view all the answers

Why is it important for auditors to understand the client's business?

To interpret financial statement results better Signup and view all the answers

What is the purpose of documenting, interpreting, and concluding on audit results?

To distinguish between potential errors and fraud Signup and view all the answers

What is a key aspect of evaluating results for financial statement analysis?

Determining if misstatements are due to one-off events Signup and view all the answers

Audit Procedures and Evidence

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Questions and Answers

What responds to risk assessment for each significant account and assertion?

Which factor has an inverse relationship with Detection Risk (DR)?

What happens to the amount of substantive testing required as the Risk of Material Misstatement (RMM) increases?

In the Audit Risk Model, which factors make up the Risk of Material Misstatement (RMM)?

What should the auditor do to obtain sufficient appropriate audit evidence?

What is the purpose of substantive audit procedures?

Which assertion is related to the completeness assertion for transactions?

What do tests of details aim to verify?

Which assertion is related to the accuracy, valuation, and allocation for account balances?

What is the main focus of risk assessment in relation to substantive audit procedures?

In relation to substantive audit procedures, what is the purpose of vouching?

What is the main focus of Analytical Procedures in auditing?

When are Computer Assisted Audit Techniques (CAATS) and Automated Data Analysis (ADAs) more useful?

In auditing, what does CAS 540 require regarding the audit of estimates?

Why is it important for auditors to understand the client's business?

What is the purpose of documenting, interpreting, and concluding on audit results?

What is a key aspect of evaluating results for financial statement analysis?

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