AUDITING questions

1. What is the principal that states that the internal controls of an entity should not be greater than the benefits those controls can be expected to deliver?

a. Reasonable assurance b. Quality control c. Segregation of duties d. Risk assessment

2. During a financial statement audit, an auditor is required to explicitly assess the risk of material misstatements that arise as a result of:

a. Human error b. Software error c. Fraud d. Criminal acts

3. An auditor is considering materiality for planning purposes. The auditor should design auditing procedures to detect misstatements that aggregate which amount?

a. The smallest amount that would have a material effect on the entity's income statement b. The largest amount that would have a material effect on the entity's income statement c. The smallest amount that would have a material effect on the balance sheet d. The combined total of the smallest amounts that would affect the income statement and the balance sheet

4. At which points of an audit is an auditor prohibited from identifying risk factors?

a. Planning b. Conducting fieldwork c. Considering acceptance of clients and engagements d. None of the above