7 Which of the following is not a valid statement with regard to obtaining an understanding of internal control over financial reporting in an audit of ICFR (integrated audit)? a. The auditor uses a "top-down approach" to understand and identify entity-level controls. b. The auditor considers "scaling the audit" to effectively plan an audit engagement. c. The auditor only tests those controls that are important to his/her conclusions about whether the controls sufficiently address the risk of misstatement for each relevant assertion identified. d. The auditor uses "walkthroughs" to test and evaluate the effectiveness of controls. 8 Which of the following is not a valid comparison of tests of controls performed in the audit of ICFR (integrated audit) and those performed in the audit of financial statements (financial a a. Both an integrated audit and a financial audit are required to obtain audit evidence b. Both an integrated audit and a financial audit are required to determine the sample s controls Both an integrated audit and a financial audit communicate control weaknesses to the management and audit committee in writing. d. Both an integrated audit and a financial audit obtain a written management representation from management related to the audit of ICFR. Chapter 9 Audit plan - Materiality and Risk Which of the following is true concerning the relationship among audit risk (specifically th detection risk), materiality (specifically the materiality threshold) and evidence (specifically the amount of evidence)? 9 a. Holding materiality constant, a higher audit risk will increase the amount of evidence. b. Holding audit risk constant, a lower materiality will increase the amount of evidence. Holding the amount of evidence constant, a higher materiality will increase audit d. Holding both audit risk and materiality constant, no amount of evidence is gathered Which of the following is true concerning the components of the audit risk model (i.e., AR IR X CR X DR)? 10. a. The auditor can change the level of AR by changing the level of IR directly b. The auditor can change the level of AR by changing the level of DR indirectly c. The auditor can change the level of AR by changing the level of CR indirectl d. The auditor can change the level of AR by changing the level of CR directl