Exam 13: Overall Audit Strategy and Audit Program

Which of the following procedures would most likely be performed in response to the auditor's assessment of the risk of monetary misstatements in the financial statements?

The ________ is the combination of the types of tests to obtain sufficient appropriate evidence for a cycle. There are likely to be variations in the mix from cycle to cycle depending on the circumstances of the audit.

If internal controls are tested and are considered effective, the auditor generally will increase both substantive tests of transactions and tests of details of balances.

Analytical procedures performed during substantive testing, such as those for the audit of inventories, are typically more focused and more extensive than those done as part of the audit planning.

For automated controls, the auditor's procedures to determine whether the automated control has been implemented may also serve as the test of that control.

Which of the following is an accurate statement regarding the four phases of the audit process?

The evidence mix includes risk assessment procedures.

Substantive tests of balances performed before year-end provide significant assurance and are normally only done when internal controls are ineffective.

The auditor performs tests of controls and substantive procedures to obtain assurance that all audit objectives are achieved for information and amounts included in those disclosures.

If the auditor's test of controls supports the control risk assessment, planned detection risk in the audit risk model is decreased, and planned substantive tests should therefore be reduced.

There is a direct relationship between the ________ transaction-related audit objective and the ________ balance-related audit objective.

Management implements internal controls to ensure that all required footnote disclosures are accurate. Auditors tests those controls to provide evidence supporting the ________ presentation.

Collectively, procedures performed to obtain an understanding of the entity and its environment, including internal controls, represent the auditor's

Which of the following is ordinarily designed to detect material dollar errors on the financial statements?

Which of the following statements is not true?

One factor that determines the amount of additional evidence required for tests of controls is the planned reduction in control risk.

The amount of additional evidence required for tests of controls depends on two things: the extent of evidence obtained in gaining an understanding of internal controls, and the planned reduction in detection risk.

For clients with highly sophisticated computerized accounting systems, auditors perform tests throughout the year to identify significant or unusual transactions. This approach is called ________ and is frequently used in integrated audits of financial statements and internal control for public companies.

Auditors must perform tests of controls separately from substantive tests of transactions.

An increased extent of tests of controls is most likely to occur when