8. In order to decrease detection risk (when you decrease detection risk you actually increase the odds that you will detect a material misstatement), risk the auditor may do all except:

MULTIPLE CHOICE

		a. Reduce substantive testing.
		b. Increase substantive testing.
		c. Move substantive testing from an interim date to year end.
		d. Increase the complexity of audit testing.

9. Inherent risk and control risk differ from detection risk in that they:

MULTIPLE CHOICE

		a. Arise from the misapplication of auditing procedures.
		b. May be assessed in either quantitative or qualitative terms.
		c. Are under the control of the client.
		d. Can be changed by the auditor.

13. The purpose of the engagement letter is:

MULTIPLE CHOICE

		a. Access control risk.
		b. Provide analytical review procedures.
		c. Avoid misunderstandings between the client and the auditor.
		d. Comply with regulatory requirements.

15. Materiality is based on:

MULTIPLE CHOICE

		a. AICPA Interpretations.
		b. Generally accepted accounting principles (GAAP).
		c. The auditor's professional judgment.
		d. Public Company Accounting Oversight Board (PCAOB) pronouncements.

16. Test of controls are designed to:

MULTIPLE CHOICE

		a. Test account balances.
		b. Determine regulatory compliance.
		c. Determine if a control is operating effectively.
		d. Determine if a control is operating efficiently.

22. When planning an audit the auditor must assess the levels of both audit risk and materiality for the engagement. How does this assessment (level of risk and materiality) affect the auditor's planned audit procedures?

25. When planning an audit the auditor must assess the levels of both audit risk and materiality for the engagement. How does this assessment (level of risk and materiality) affect the auditor's planned audit procedures?

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