Audit

1- What is the audit risk model? What are its components? How is it used by auditors?

2. Define the following: inherent risk, business risk, audit risk, control risk, planned detection risk, and materiality.

3. What is sampling? When and why is it required in an audit? 45. What are the advantages and disadvantages of sampling?

4. What is the difference between statistical and non-statistical sampling?

5. List and describe 3 sampling techniques.

6. Describe Type 1 and Type 2 errors in sampling.

7. What is statistical risk? Confidence level? Tolerable and expected error?

8. Describe the process of applying attribute sampling to test of controls.

9. What is stratified sampling?

10. What is the difference between an error and a fraud?

11. What type of audit procedures are performed by an auditor? Why are they performed?

12. Why are auditors required to retain audit documentation?

13. What are audit working papers? Who owns these documents? These papers must be kept confidential. Can they ever be released to other parties?

14. How long is the auditor required by the PCAOB to retain the audit working papers of public companies? Of private companies?