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University
Materiality and Audit Risk
10 questions
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- 1. Multiple Choice
_________ is the risk that an auditor expresses an inappropriate opinion on the financial statements.
Fraud
Inherent Risk
Audit Risk
Materiality
- 2. Multiple Choice
Materiality does depend on the decisions of users who rely on the statements to make the decisions
TRUE
FALSE
- 3. Multiple Choice
Auditing standards define ________ as the magnitude of misstatements that individually, or when aggregated with other misstatements, could reasonably be expected to influence the economic decisions of users made on the basis of the financial statements.
Fraud
Inherent Risk
Materiality
Detection Risk
- 4. Multiple Choice
Factor that in assessing inherent risk, exclude :
Nature of client
Integrity of management
Client motivation
Nature of audit test
- 5. Multiple Choice
There are types of risk, exclude :
Inherent Risk
Detection Risk
Control Risk
Internal Risk
- 6. Multiple Choice
Which statement is true about effect for audit risk and business risk:
Audit risk : Credibility of an
auditor will be questioned
business risk : Gain of customer
Audit Risk
Business Risk
- 7. Multiple Choice
Which one is not the level of audit materiality ?
Immaterial
Material
Very Material
Detection Risk
- 8. Multiple Choice
Which one is not a preliminary judgements about audit materiality ?
determining the nature, timing and extent of risk assessment procedures
Identifying and assessing the risk of material misstatements
Determining the nature, timing and extent of further audit procedures
The nature of business entity
- 9. Multiple Choice
Arrange the statement based on stage of audit materiality in audit process
i. involve determining
tolerable misstatement based on planning materiality.
ii. Materiality in planning and performing an Audit states that designing the audit plan, an auditor needs to establish an acceptable level of materiality so as to detect quantitative material misstatements.
iii. completed near the end of
the audit, and the auditor evaluates all the audit evidence gathered.
i, ii, iii
ii, i, iii
iii, ii, i
ii, iii, i
- 10. Multiple Choice
The factors effecting the auditor's judgement about materiality are as follows:
i. materiality is a relative concept rather than an absolute concept
ii. bases are needed for evaluating materiality
iii. qualitative factors
iv. quantitative factors
ii, iii, iv
i, iii, iv
i, ii, iii
i, ii, iv
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