IIA IIA-CIA-Part2 Quiz 118 Topic 8 Questions 586-590

Question: 1

The acceptable level of detection risk is inversely related to the

AAssurance provided by substantive tests.

BRisk of misapplying auditing procedures.

CPreliminary judgment about materiality levels.

DRisk of failing to discover material misstatements.

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Question: 2

As the acceptable level of detection risk decreases, an auditor may

AReduce substantive testing by relying on the assessments of inherent risk and control risk.

BPostpone the planned timing of substantive tests from interim dates to the year-end.

CEliminate the assessed level of inherent risk from consideration as a planning factor.

DLower the assessed level of control risk from the maximum level to below the maximum.

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Question: 3

Which of the following audit risk components may be assessed in no quantitative terms? Control Risk Detection Risk Inherent Risk

AYes Yes Yes

BNo Yes Yes

CYes Yes No

DYes No Yes

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Question: 4

Holding other planning considerations equal, a decrease in the amount of misstatements in a class of transactions that an auditor could tolerate most likely would cause the auditor to

AApply the planned substantive tests prior to the balance sheet date.

BPerform the planned auditing procedures closer to the balance sheet date.

CIncrease the assessed level of control risk for relevant financial statement assertions.

DDecrease the extent of auditing procedures to be applied to the class of transactions.

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Question: 5

Which of the following is a false statement about materiality?

AThe concept of materiality recognizes that some matters are important for fair presentation of financial statements in conformity with GAAP, while other matters are not important.

BAn auditor considers materiality for planning purposes in terms of the largest aggregate level of misstatements that could be material to any one of the financial statements.

CMateriality judgments are made in light of surrounding circumstances and necessarily involve both quantitative and qualitative judgments.

DAn auditor's consideration of materiality is influenced by the auditor's perception of the needs of a reasonable person who will rely on the financial statements.

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IIA IIA-CIA-Part2 Quiz:118 Topic:8 Questions:586-590