Q1: How does the risk of material misstatement fit into the audit risk model and impact audit planning?

Group of answer choices

A: The risk of material misstatement is the overall risk to be borne by the audit firm.

B :The risk of material misstatement is the total risk contained in the audit, including sampling and nonsampling risks.

C: The risk of material misstatement is the combination of inherent risk and control risk, and is used to determine detection risk.

D: The risk of material misstatement is the combination of control risk and detection risk, and is used to estimate fraud risk in the financial statements.

Q2: A letter of audit inquiry is:

Group of answer choices

A: a required communication between the Board of Directors and the audit firm.

B: an inquiry from the audit firm to management regarding upper management's knowledge of accounting irregularities or fraud contained in the financial statements.

C: a letter sent to the client's primary attorney regarding any claims or litigation.

D: a letter sent to all of the client's attorneys regarding any claims or litigation.

Q3: A basis for deciding not to issue an unqualified opinion is:

Group of answer choices

A: Inadequate evidential matter.

B: A non-pervasive departure from GAAP.

C: A pervasive departure from GAAP.

D:All of the above.