wE 5) Below are ten independent risk factors which external users rely on the ta
ID: 2327998 • Letter: W
Question
wE 5) Below are ten independent risk factors which external users rely on the tatements. 1 The degre tails to detect employe thet of inventory from the warehouse becaue he are no restrictions on warehouse acces a on warehouse access and the dlient does not reconcile invwen tory on on hand to recorded amounts on a timely basis The likelhood that a dlient will have financial difficultes after the audit that a client will have financial difficuties after the audit report is issued , hdgment Required to Correctly Record Account Balances and Transactions The assigned staff on the audit engagement lacks the necessary skills to idenify actual errors in an account balance when examining audit evidence accumulated. 6 The auditor's evaluation of management's integrity ,. The individual items making up the total population also affect the auditor's expecta tion of material misstafement restructuring changes resulting from discontinued operations. k Fire losses, major property acquisitions, purchase of complex investments, and 9. The audit program omits several necessary audit procedures 10. The dlient fails to reconcile bank accounts to recorded cash balances. lentify which of the following audit risk model components relates most directly to each Requied of the ten risk factors: .Acceptable audit risk . Control risk . Inherent risk . Planned detection riskExplanation / Answer
Answer:
Related Audit Risk Model Component
1
The degree to which external users rely on the statements.
Acceptabe audit risk
2
The client fails to detect employee theft of inventory from the warehouse because there are no restrictions on warehouse access and the client does not reconcile inventory on hand to recorded amounts on a timely basis.
Control risk
3
The likelihood that a client will have financial difficulties after the audit report is issued.
Acceptabe audit risk
4
Judgment Required to Correctly-Record Account Balance and Transactions.
Inherent risk
5
The assigned staff on the audit engagement lacks necessary skills to identify actual errors in an account balance when examining audit evidence accumulated.
Planned detection risk
6
The auditor’s evaluation of management’s integrity.
Acceptabe audit risk
7
The individual items making up the total population also effect the auditor’s expectation of material misstatement.
Inherent risk
8
Fire losses, major property acquisitions, purchase of complex investments, and restructuring changes resulting from discontinued operations.
Inherent risk
9
The audit program omits several necessary audit procedures.
Planned detection risk
10
The client fails to reconcile bank accounts to recorded cash balances.
Control risk
Related Audit Risk Model Component
1
The degree to which external users rely on the statements.
Acceptabe audit risk
2
The client fails to detect employee theft of inventory from the warehouse because there are no restrictions on warehouse access and the client does not reconcile inventory on hand to recorded amounts on a timely basis.
Control risk
3
The likelihood that a client will have financial difficulties after the audit report is issued.
Acceptabe audit risk
4
Judgment Required to Correctly-Record Account Balance and Transactions.
Inherent risk
5
The assigned staff on the audit engagement lacks necessary skills to identify actual errors in an account balance when examining audit evidence accumulated.
Planned detection risk
6
The auditor’s evaluation of management’s integrity.
Acceptabe audit risk
7
The individual items making up the total population also effect the auditor’s expectation of material misstatement.
Inherent risk
8
Fire losses, major property acquisitions, purchase of complex investments, and restructuring changes resulting from discontinued operations.
Inherent risk
9
The audit program omits several necessary audit procedures.
Planned detection risk
10
The client fails to reconcile bank accounts to recorded cash balances.
Control risk
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.