Reference no: EM132665055

Problem 1, Regarding the Audit Risk Model, Detection Risk would vary how with Inherent Risk?

a. Cumulatively

b. Directly

c. Exponentially

d. Indirectly

Problem 2, . Consider the following statements:

I. A financial statement audit is based on procedures stated in Generally Accepted Accounting Principles.

II. A "trivial amount" would be considered nonmaterial.

a. I is true; II is true

b. I is true; II is false

c. I is false; II is true

d. I is false; II is false

Problem 3, "Two or more people acting together to circumvent controls" is referred to as:

a. Co-adapting c. Competing

b. Collusion d. Computing

Problem 4, During the planning stage of the audit, an auditor is identifying matters for communication to the entity's audit committee. The auditor would most likely ask management whether:

a. There was significant turnover in the accounting department.

b. it consulted with another CPA firm about installing a new computer system.

c. There were changes in the application of significant accounting principles,

d. it agreed with the auditor's selection of fraud detection procedures