1. Which of the following is the most valid reason why auditors need to design and implement responses to assessed risks of material misstatement?

a. to gain reasonable assurance that all fraud and errors will be detected

b. to obtain sufficient appropriate audit evidence about the assessed risks as a basis for the auditor's opinion

c. to afford management with a relief of its responsibility over the financial statements.

d. to provide management with resolutions to the assessed risks.

2. The auditor's overall responses to risks of material misstatement at financial statements level are least likely documented in

a. a stand-alone document

b. the overall audit strategy

c. the detailed audit program

d. all of the above

3. The auditor should determine overall responses to address the risks of material misstatement at the financial statement level. Such responses least likely include

a. emphasizing to the audit team the need to maintain professional skepticism in gathering and evaluating audit evidence

b. assigning more experienced staff or those with special skills or using experts

c. incorporating additional elements of unpredictability in the selection of further audit procedures to be performed

d. performing substantive procedures at an interim date instead of at period end

4. The auditor should determine overall responses to address the risks of material misstatement at the financial statement level. Such responses most likely include

a. providing more supervision

b. making general changes to the nature, timing, or extent of procedures

c. both a and b

d. neither a nor b

5. Paragraph 18 of PSA 330 requires substantive procedures to be performed for each material class of transactions, account balance, and disclosure irrespective of the assessed risks of material misstatement (ROMM). This reflects the fact that:

a. the auditor's assessment of risk is judgmental and so may not identify all risks of material misstatement

b. there are inherent limitations to internal control, including management override

c. both a and b

d. neither a nor b