Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Bob and Casey, two audit staff associates are discussing audit procedures for the upcoming audit of Yacht LLC, a purveyor of luxury sailing boats to
Bob and Casey, two audit staff associates are discussing audit procedures for the upcoming audit of Yacht LLC, a purveyor of luxury sailing boats to clients in the United States and Europe. In particular, Bob and Casey are discussing the nature, timing and extent of audit procedures that they will likely be involved in undertaking. Which of the following statements best describes an example of an audit procedure that may be conducted??
The auditor is likely to request the internal audit function test all internal controls employed by the client. Once this is complete, the internal audit function should provide a formal written report to the external auditors, for inclusion in the permanent audit file. | ||
A specific audit procedure may be conducted closer to the end of the audit, especially for accounts and transactions that the auditor has determined represent decreased audit risk. | ||
With respect to the extent of a particular audit procedure, the auditors may decide to increase sample size if detection risk has been assessed as low, and conversely decrease sample size if detection risk has been assessed as high. | ||
The auditors are likely to perform substantive procedures, including substantive tests of details on the client's internal controls. These procedures are to designed to ensure that client-designed internal controls are operating effectively. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started