auditing

5) 5) Which of the following is an incorrect statement regarding the allocation of the preliminary judgment about materiality to balance sheet accounts? A) Auditors expect to identify overstatements as well as understatements in the accounts. B) Auditors expect certain accounts to have more misstatements than others. C) The allocation has virtually no effect on audit costs because the auditor must collect sufficient appropriate audit evidence. D) Relative audit costs affect the allocation. 6 6) Which of the following would not increase the risks of material misstatement at the overall financial statement level? A) deficiencies in management's integrity B) effective oversight by the board of directors C) inadequate accounting systems D) all of the above 7) gement's assertions with respect to implementing internal controls is the auditor primarily concerned? A) compliance with applicable laws and regulations B) efficiency of operations C) effectiveness of operations D) reliability of financial reporting 8) The auditor designs and performs a combination of tests of controls and substantive procedures to 8)- obtain reasonable assurance that the financial statements are fairly stated when control risk B) is assessed below the maximum. D) none of the above A) cannot be assessed. C) is assessed above the maximum. 9) Tests of controls and substantive tests of transactions are an important determinant of the extent of 9) the auditor's use of tests of details of balances. Which of the following is true? A) They are likely to be performed prior to the client's end of the fiscal year B) They are likely to be used only in the audit of internal control C) They are likely to have no impact on the planned tests of details of balances. D) They are likely to eliminate the need for tests of details of balances