Question 1 (4 points) Which of the following is incorrect with respect to planning and performing tests of controls? When planning, all misstatements will be considered to be prevented or detected by internal control. Auditors begin planning tests of controls by considering the misstatement of concern because the auditor will focus tests of controls on that specific misstatement. When planning tests of controls, auditors will consider potential misstatements at both the account and assertion levels. The nature of the internal control determines which audit procedures can be used to test the control. Question 2 (4 points) Saved When there is a material weakness in internal control over financial reporting (I/C over F/R). the client's financial statements will be materially misstated. True False Question 3 (4 points) Saved The high-risk assertion for accounts with a risk of overstatement is Completeness. True False Question 4 (4 points) Saved Under the Securities Act of 1933, auditors may be held liable for ordinary negligence, whereas the standard of care is gross negligence under the Securities Exchange Act of 1934. True False Question 5 (4 points) Saved Auditing standards require auditors to presume that revenue recognition has low FFR risk. True False Question 6 (4 points) Auditors obtain reasonable assurance that financial statements are fairly stated by performing all of the following except: Performing substantive tests to detect misstatements. Determining whether internal control can be relied upon to prevent/detect misstatements Establishing strong systems of internal control, Evaluating the materiality of misstatements detected