Question 7: wiley CPA has determined that their prospective new client, Sweetest Soft Drinks, Inc., has an adequate level of integrity, making it appropriate for wiley to accept the engagement. However, Sweetest Soft Drinks, Inc. cannot be regarded as completely honest in all dealings. In this case, wiley CPA is likely to:- A. Increase inherent risk and control risk B. Increase acceptable audit risk and reduce inherent risk C. Reduce acceptable audit risk and increase inherent risk D. Reduce inherent risk and control risk Question 8: One homework assignment in this class required the allocation of the preliminary judgement about materiality to balance sheet accounts. Which of the following statements is NOT correct regarding this assignment? A. Auditors expect certain accounts to have more misstatement than other B. Accounts with more complexity should have a lower level of tolerable misstatement C. Auditors expect to identify overstatements as well as understatements in the accounts D. The client does not participate in the determination of materiality Question 9: Gabe Austin, CPA believes the chance of financial failure is high for his new client, city Duds Inc., and Austin has determined that there is a corresponding increase in engagement risk for his audit firm. consequently, acceptable audit risk would likely: A. Be reduced B. be increased C. remain the same D. be calculated using the appropriate statistical software