true or false

1. Audit risk refers to the possibility that a CPA firm may not finish its audit according to its time allowed and within the budget. 2. Relevant assertions are those items identified which are included in the engagement letter that serve as warranties for the benefit of the client. 3. Inherent risk is the possibility of material misstatement of an assertion before considering the client's internal control. 4. Control risk is the risk that a material misstatement could occur in a relevant assertion and not be prevented or detected on a timely basis by the client's internal control. 5. Detection risk is the risk that the auditors' procedures will not detect a material misstatement that exists in a relevant assertion. 6. Reliability of audit evidence is enhanced when it is provided directly by the client. 7. The auditors perform a variety of audit procedures, some of which are known to the client, including interviews of restaurant managers where the client frequently goes for lunch. 8. Representation letters are required when the client asserts that his company is a going concern. 9. Watching a process or procedure being performed by the company's personnel or the performance of control activities is a form of audit procedure. 10. Audit procedures include direct evidence such as documentation and client interviews, but not any theoretical or computational analysis. 11. Comparison of the client's balance sheet or income statement with industry averages isn't a basis for identifying audit risks. 12. Evidence of fair values may be obtained in a confidential questionnaire to employees. 13. If a confpany leases its premises from the CEO's wifes' uncle, this does not need to be disclosed. 14. Working papers derived from client information belong to the Board of Directors. 15. The company Chart of Accounts is considered the "backbone" of the entire set of working papers 16. The purpose of the permanent file of working papers is to memorialize the founder of the company 17. Tick marks are a form of wart spread from handing working papers with mold. 18. Paperless audits lack reliability because they lack a paper trail. 19. Audits of previous years are of little value in a new audit because business is dynamic and constantly changes. 20. So long as the financial statements are audited, the working trial balance becomes less important