Risk Response in Auditing and Assurance

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Questions and Answers

What is the starting point for designing an effective audit response?

  • External confirmation of audit evidence
  • Listing of assessed risks developed at the end of the risk assessment phase (correct)
  • Assessment of material misstatements at assertion levels
  • Conducting analytical procedures

At what levels is an assessment of the risks of material misstatements required?

  • Neither financial statement nor assertion levels
  • Only financial statement level
  • Both financial statement and assertion levels (correct)
  • Only assertion level

What do responses to the risk consist of?

  • External confirmation of audit evidence
  • Maintaining audit documentation
  • Conducting audit sampling
  • Designing various audit procedures to gather evidence about financial statement assertions (correct)

Which standard is specifically for external confirmation?

<p>PSA 505: External Confirmation (C)</p> Signup and view all the answers

When is an assessment of the risks of material misstatements required?

<p>At both financial statement and assertion levels (D)</p> Signup and view all the answers

What is the starting point for designing an effective audit response?

<p>Listing of assessed risks developed at the end of the risk assessment phase (B)</p> Signup and view all the answers

At what levels is an assessment of the risks of material misstatements required?

<p>Both financial statement and assertion levels (D)</p> Signup and view all the answers

What do responses to the risk consist of?

<p>Designing various audit procedures to gather evidence about financial statement assertions (A)</p> Signup and view all the answers

Which standard is specifically for external confirmation?

<p>PSA 505: External Confirmation (D)</p> Signup and view all the answers

What is required at both financial statement and assertion levels?

<p>Assessment of the risks of material misstatements (D)</p> Signup and view all the answers

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