Assessing the risk of material misstatement

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Reference no: EM132974235

QUESTIONS

1: Which components of the audit risk model can be controlled by the auditor? Discuss the interrelationships.

2: Identify and explain the three steps in assessing the risk of material misstatement?

3: Give three reasons why the predominantly substantive approach can be more suitable (or smaller entities.

4: Identify the three types of substantive procedures and discuss the effectiveness of each.

5: Why are cut-off tests a special category of tests of details of transactions?

6: Explain why there is an increased audit risk from conducting procedures before the end of the reporting period and identity two ways in which this increased risk is controlled.

7: Why may an auditor decide to perform tests of details on income statement accounts rather than relying on analytical review?

8: How can generalised software be used to assist In performing substantive procedures during the audit?

9: What steps may the auditor perform in evaluating the reasonableness of accounting estimates?

10: Why is the audit of related party transactions a particular risk area for auditors?

Reference no: EM132974235

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