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Questions and Answers
Which of the following is NOT a reason for assessing control risk as high?
Which of the following is NOT a reason for assessing control risk as high?
- Policies and procedures are not pertaining to an assertion
- The auditor should always assess control risk as high (correct)
- Obtaining enough or proper evidence is not efficient
- Policies and procedures are not effective
What should the auditor do to address risks during the audit?
What should the auditor do to address risks during the audit?
- Assign less experienced staff
- Emphasize the need to maintain professional skepticism (correct)
- Incorporate predictable elements in the selection of further audit procedures
- Provide less supervision
When should the auditor communicate material weaknesses in the internal control system to management?
When should the auditor communicate material weaknesses in the internal control system to management?
- Through a Management Letter only if requested by management
- At the end of the audit
- As soon as practicable and at an appropriate level of responsibility (correct)
- In an oral communication
What should the auditor do if control risk is assessed as high?
What should the auditor do if control risk is assessed as high?
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Which of the following is NOT a reason for assessing control risk as high?
Which of the following is NOT a reason for assessing control risk as high?
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Study Notes
Assessing Control Risk
- Assessing control risk as high is not due to the existence of an internal audit function.
Addressing Risks during Audit
- To address risks during the audit, the auditor should identify and assess the risks of material misstatement, whether due to error or fraud.
Communicating Material Weaknesses
- The auditor should communicate material weaknesses in the internal control system to management on a timely basis.
Control Risk Assessed as High
- If control risk is assessed as high, the auditor should perform more detailed substantive procedures to gather sufficient evidence.
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