Statements	Answer
1.	The auditors must assess the risk of material misstatement of financial statements due to the two types of fraud, fraudulent financial reporting and __________.	misappropriation of assets
2.	Assertions are __________ that are set forth in the financial statements.
3.	The __________ of SEC registrants selects the company's audit firm.
4.	The __________ provides an overview which includes the nature, timing and extent of procedures to be performed in an audit.
5.	Audit procedures that are focused on the effectiveness of internal control are called __________.
6.	The term __________ refers to the process of determining that transactions are reflected in the proper accounting period.
7.	Audit risk at the account balance level consists of three components: (1) __________, (2) control risk and (3) detection risk.
8.	Tests of balances and transactions designed to detect material misstatements are called __________.

• audit committee
• audit plan
• confirmation
• cutoff
• inherent risk
• misappropriation of assets
• representations of management
• risk
• substantive procedures (tests)
• tests of controls