1) Which of the following is NOT a characteristic of management's philosophy and operating style?

A. Conscientiousness and conservatism in developing accounting estimates

B. Approach to taking and monitoring business risks

C. Monitoring policies for developing and modifying accounting systems

D. Its attitudes and actions toward financial reporting

2) Management’s risk assessment should include the following special consideration of risks that may arise from changed circumstances EXCEPT

A. New technology.

B. New personnel.

C. Rapid growth.

D. Domestic operations.

3) An auditor has computed the revised level of detection risk by direct use of the audit risk model. This means that the auditor must have

A. Used the primarily substantive approach in planning the audit.

B. Assessed control risk at the maximum.

C. Used a flowchart to document the understanding of the complete internal control structure.

D. Quantified all the relevant risk assessments.

4) In the audit risk model, audit sampling applies to

A. Control risk and detection risk.

B. Detection risk.

C. Inherent risk and detection risk.

D. Inherent risk and control risk

5) Audit sampling in involved whenever an auditor

A. Performs tests of controls.

B. Examines 100% of the population.

C. Performs tests of details.

D. Makes an inference about a population characteristic based on a partial examination of that population.