What must the detection risk be set at if the auditor requires an acceptable audit risk of 10% and the inherent risk and control risk are 75% and 80% respectively.

a)6

b)16.7%

c)6%

d)None of above

32.For a particular assertion, the auditor has specified an overall audit risk of 10%, assessed inherent risk as 50% and control risk as 20% and the calculated detection risk to be 100%. The audit implication is that

a)The auditor made an error in calculating detection risk

b)The inherent and control risks are sufficiently low that it may not be necessary for the auditor to perform extensive substantive procedures

c)The auditor will need to perform extensive substantive procedures to compensate for the high level of detection risk

d)The auditor should reduce the extent of tests of controls so that the assessed level of control risk will be higher, and the detection risk will be lower

33.An auditor will most likely perform extensive tests for possible understatement of

a)Revenues

b)Equity

c)Assets

d)Liabilities

34.The rights and obligation assertion applies to only

a)Current liability items

b)Revenue and expense items

c)Balance sheet items

d)All items

35.Which of the following is not an attest engagement?

a)Direct reporting

b)Sustainability

c)Forensic

d)Tax preparation