1. Test of controls are also known as a. Tests of details b. Material misstatement testing c. Internal controls testing d. Substantive control testing 2. An audit plan details the nature, extent, and timing of audit procedures to be performed. The "liming" of audit procedures is best defined as A. the reliability and relevance of evidence obtained in the audit B. how much testing will be done C. When the procedure will be performed D. what type of procedure will be used 3. If inherent risk is determined to be high for an account or assertion, the next step is to a. determine whether management is aware of the risk b. perform less extensive detailed substantive tests c. determine if professional skepticism is being used d. determine if an internal control is in place to mitigate the risk of a material misstatement 4. What audit procedures are designed to detect material misstatements at the assertion level? a. Substantive procedures b. Misappropriation of assets c. Tests of control d. Fraudulent financial reporting 6. Which of the following courses of action is the most appropriate if an auditor concludes that there is a high risk of material misstatement? a. Increase tests of controls. b. Select more effective substantive tests. c. Perform substantive tests as of an interim date. d. Use smaller, rather than larger, sample sizes. What is audit risk? a. The assessed risk of material misstatement that, in the auditor's judgment, requires special audit consideration b. The risk that is explicit or implied and made by management regarding the recognition, measurement, presentation and disclosure of items included in the financial statements and notes c. The risk that an auditor expresses an inappropriate audit opinion when financial statements are materially misstated d. The risk that a client's internal controls will not prevent or detect a material misstatement on a timely basis