Question 31

3pts

Assertions about presentation and disclosure typically include _______.

Group of answer choices

cutoff, accuracy, and valuation

completeness, accuracy and valuation, and classification and understandability

existence, rights and obligations, and cutoff

cutoff, presentation, and disclosure

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Question 32

3pts

If the auditor determines that internal controls are not functioning as designed, and a compensating control does not exist, the auditor will assess control risk and the risk of material misstatement (RMM) as_______.

Group of answer choices

low and set detection risk as high

low and set detection risk as low

high and set detection risk as low

high and set detection risk as high

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Question 33

3pts

If significant fraud risk exists, the auditors should _______.

Group of answer choices

respond by including elements of unpredictability in their audit plan

respond by including elements of predictability in their audit plan

plan to place greater reliance on the internal audit function

be able to place greater reliance on management assertions

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Question 34

3pts

For clients with multiple locations, the auditors_______.

Group of answer choices

could not vary which locations are tested each year, but instead vary the type of audit procedures that are performed at the different locations

could vary which locations are tested each year and the type of audit procedures that are performed at the different locations

should always hire another auditor to check other locations, and not attempt to dothis themselves

could vary which locations are tested each year and not change the type of audit procedures that are performed at the different locations

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Question 35

3pts

When analytical procedures are used to obtain audit evidence during the risk response phase, _______.

Group of answer choices

they are referred to as tests of internal control

the audit report is ready to be issued

management should be allowed to select the procedures and tests

they are referred to as "substantive analytical procedures."

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Question 36

3pts

Every audit will involve _______.

Group of answer choices

no substantive testing because audit standards require it not to be conducted for relevant assertions

conflicts with management pertaining to estimates

relying on the internal audit function for production of evidentiary matter

some amount of substantive testing because audit standards require it for relevant assertions

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Question 37

3pts

A dual-purpose test _______.

Group of answer choices

involves the auditors designing a test of controls and a substantive test of details to be performed at the same time on the same transaction

involves the auditors designing a test of controls and a substantive test of details to be performed at the same time on different transactions

involves the auditor being able to bill the client for two tests when only one was performed

involves satisfying informational requests from management and the client's legal counsel simultaneously

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Question 38

3pts

Some substantive procedures can only be performed at year-end _______.

Group of answer choices

because there have been no transactions occurring in these accounts during the year

due to the nature of the assertion or the timing of the transactions

once the internal audit function has completed its preliminary testing of the account

due to management not allowing the auditors access beforehand

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Question 39

3pts

An example of a qualitative factor auditors will consider when determining sample size is _______.

Group of answer choices

the accounts receivable turnover ratio

the percentage of bad debt expense

the days in receivables ratio

significant turnover in the accounts receivable department

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Question 40

3pts

One method of selecting specific items from a population when testing for overstatement is to _______.

Group of answer choices

allow the internal auditors to select them

allow management to select them

select items that are identical dollar amounts

select items that are over a certain dollar amount