I. An auditor begins planning tests of controls by considering the misstatement of concern Which of the following statements regarding internal controls is correct? Question 5 options When internal controls are ineffective, the extent of substantive tests will be increased. Question options: Thie C False When internal controls are ineffective, tbe extent of tests of controls will be increased. 2. Actual audit risk will exceed the low level established by firm policy when the auditor does not cllectively manage detection risk. When internal controls are effective. the auditor may eliminate substantive tests. Question 2 option True The effectiveness of internal controls does not affect the level of acceptable detection risk False 3. Your firm is auditing a wholesaler that sells slot machines to Las Vegas casinos. You are concerned that your client's inventory balance is understated. Which of the below procedures best addresses your concern? Question 3 options: Inspect and count inventory in the warehouse and then check to see if the inventory counted is recorded in the accounting records Luspect and count inventory recorded in duc accousting records. Testimonial controls related to Uustion of slot machines to customers. Test internal controls related to inventory accounting methods. 1. The source of evidence when an auditor inspects a document or a physical assel is the auditor's own experience of seeing the document or asset. Question 4 options Truc C False I. An auditor begins planning tests of controls by considering the misstatement of concern Which of the following statements regarding internal controls is correct? Question 5 options When internal controls are ineffective, the extent of substantive tests will be increased. Question options: Thie C False When internal controls are ineffective, tbe extent of tests of controls will be increased. 2. Actual audit risk will exceed the low level established by firm policy when the auditor does not cllectively manage detection risk. When internal controls are effective. the auditor may eliminate substantive tests. Question 2 option True The effectiveness of internal controls does not affect the level of acceptable detection risk False 3. Your firm is auditing a wholesaler that sells slot machines to Las Vegas casinos. You are concerned that your client's inventory balance is understated. Which of the below procedures best addresses your concern? Question 3 options: Inspect and count inventory in the warehouse and then check to see if the inventory counted is recorded in the accounting records Luspect and count inventory recorded in duc accousting records. Testimonial controls related to Uustion of slot machines to customers. Test internal controls related to inventory accounting methods. 1. The source of evidence when an auditor inspects a document or a physical assel is the auditor's own experience of seeing the document or asset. Question 4 options Truc C False