{Auditing} 37. Based on professional judgment an auditor establishes that if the amount of error or omission is within 1% of total revenue it is not considered as misstatement. Assume, the amount of service revenue is overstated by OMR 5,000 which is 5% of total revenue. Does it amount to material misstatement? a. No, as the percentage of misstated amount is less than 1% of total revenue b. Unable to decide as the data is inadequate c. None of the options d. Yes, as the percentage of materially misstated amount is more than 1% of total revenue

Q: Audit risks for particular accounts and disclosures can be conceptualized in the model: Audit risk…

A: Given: The particular accounts and disclosures of audit risks can be conceptualized in the model.

Q: The auditor was unable tO confirm from the Bills receivable amounted OMR 250,000 by communicating…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: Members of the audit engagement team are required to discuss the susceptibility of the entity's…

A: Audit frauds are conducted to hide the actual position of the financial statements of the company to…

Q: In considering materiality for planning purposes, an auditor believes that misstatements aggregating…

A: It would be appropriate to design auditing procedures that would be expected to detect misstatements…

Q: The auditor is not expected to, and cannot, reduce audit risk to zero and cannot therefore obtain…

A: Auditor An auditor refers to the person who is responsible for reviewing the company’s financial…

Q: TNC advertising company appointed an auditor to resolve the problem of irregular accounts that is…

A: Audit procedures are the procedures that are used to check or authenticate whether the transactions…

Q: The following are concepts discussedin this chapter:1. Preliminary judgment about 7. Estimated total…

A: a. Following items are audit planning decisions that require professional judgment as follows: 1.…

Q: 2. What is the revenue-recognition abuse identified in the article related to the…

A: In the article related to the percentage of completion method, the revenue recognition abuse that is…

Q: amount to material misstatement

A: The auditor may have fixed a definite percentage for tolerable misstatements. If the actual…

Q: S1: The risk of material misstatement of the financial statements is generally lesser when account…

A: It is required rather necessary for an auditor to obtain sufficient evidence and be independent…

Q: If an auditor assigns a tolerable misstatement of $1,000 to accounts payable, he or she would need…

A: Audit: It is a systematic examination of books of accounts of an individual or a firm. It is done by…

Q: least likely to be your starting point in computing materiality

A: First option is wrong because normalized net income is one of the three benchmarks for computing…

Q: 8 Answer is not complete. a. Evaluating the effectiveness of the client's internal control in…

A: Risk Assessment: The  client’s internal  control  is evaluated to get the effectiveness of it. It is…

Q: susceptibility of fraud r

A: Option a is wrong because susceptibility denotes the possibility of fraud, not the occurrence of…

Q: If an audit team calculated a ULRD of 5 percent when the tolerable rate of deviation was 4percent,…

A: Answer: option b

Q: control risk in order to reduce

A: Statement 1 is correct because by performing additional compliance tests, the auditor can ensure…

Q: In accordance with ISA 315, the auditor shall identify and assess the risks of material misstatement…

A: ISA 315 -IDENTIFYING AND ASSESSING THE RISKS OF MATERIAL MISSTATEMENT THROUGH UNDERSTANDING…

Q: gement. Requirement: 1.Discuss the differences between the modified and unmodified audit…

A: 1. DIFFERENCE BETWEEN MODIFIED & UNMODIFIED AUDIT REPORTS DEFINITION:- An auditor gives an…

Q: Accounting The public believes that auditors test 95% of transactions. A reasonable public…

A: Auditing Standards- Generally accepted auditing standards (GAAS) are a set of methodical procedure…

Q: Select the correct answer(s) for the following multiple choice questions. Note that there may be…

A: SAS No.99: SAS No.99 stands for Statement on Auditing Standards No.99: Consideration of Fraud. It is…

Q: {Auditing} 17. Based on professional judgment an auditor establishes that if the amount of error or…

A: Auditing means the independent checking of a company's operation by the outsider known as an…

Q: 1. The audit risk is 3% while the inherent risk is 80% and control risk is 40%. What is the…

A: Audit risk seems to be the chance that the audit would contain human mistakes and so would not be…

Q: The auditors assessed risk of material misstatement at 0.50 and said they wanted to achieve a0.05…

A: Detection risk: It can be defined as the risk that the auditor may fail in detecting the significant…

Q: An auditor discovered the following errors and irregularities while performing tests of controls:…

A:

Q: If the audit report states that the financial statement is not free from material misstatements , it…

A: Audit report is the statement given by the auditor on the financial statements and reports of any…

Q: Based on professional judgment an auditor establishes that if the amount of error or omission is…

A: A material misstatement is a financial transaction or representation of the financial transaction in…

Q: (1)   Audit Reports:       (A)   What types of companies are required to obtain an independent…

A: (Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: The auditor is testing receivables with the audit procedure the confirmation letters.  Book value…

A: Auditing means the independent checking of company operation by outsider. Auditor is  qualified and…

Q: Tracy, senior accountant at JFM CPA firm, is determining the performance materially materially in…

A: The primary purpose of the setting overall materiality is that when planning is to be used to…

Q: Which of the following circumstances would most likely cause an auditor to suspectthat material…

A: Audit Planning: For efficient performance of auditing, the auditor must plan the work with gaining…

Q: During a consulting engagement involving the development of a new accounts payable system, an…

A: The auditor reviewing the disbursements process should do which of the following? Answer - Report…

Q: Based on professional judgment an auditor establishes that if the amount of error or omission is…

A: Auditing means the independent checking of a company's operation by the outsider person known as an…

Q: An auditor has to determine both the reliability and the relevance of potential audit evidence in…

A: Audit evidence refers to the documents and information that an auditor uses while arriving at the…

Q: means the application of audit procedures to less than 100% of the items within an account balance…

A: Correct is Option C - Audit Sampling Audit sampling Means application of Audit procedures to less…

Q: An internal auditor plans to use an analytical review to verify the correctness of various operating…

A: When there is fraud in the account, the would not show a correct view.

Q: The risk of overreliance is 5%, EDR is 2, TRD is 5, and the number of deviations found is 2. The…

A: Audit can be defined as the verification and evaluation of the financial data and information…

Q: George Company, a CPA firm, conducted an audit for the 2020 financial statements of Simon…

A: Control risk refers to the risk of not preventing or detecting the material misstatement even after…

Q: Which of the following is NOT a reason the auditor performs some substantive procedures at an…

A: solution interim audit                 An auditor may choose to perform the audit before the end of…

Q: If an auditor assigns a tole misstatement of $1,000 to payable, he or she would r obtain less audit…

A: Both overstatements and understatements should be considered once allocating materiality to record…

Q: You are reviewing the results of the Firestone audit. These are the details of the summay of…

A: Performance Materiality describes the level of materiality set by the auditor to reduce to an…

Q: In an audit sampling application, an auditora. Performs procedures on all items in a balance and…

A: An Auditor takes sampling data to conclude his results.

Q: Which of the following factors most likely would cause an auditor not to accept a new audit…

A: Internal Controls: Internal controls are the principles, procedures and rules applied by a company…

Q: As a result of analytical procedures an auditor determines that gross profit has declined from 30%…

A: The auditor's duty is to identify the fraud and errors in the financial statement of the company. If…

Q: DETERMINE WHETHER TRUE OR FALSE S1- Toward the end of an engagement, after all audit evidence has…

A: Auditing is an important activity that ensure the reliability and accuracy of the projected…

Q: Below are ten independent risk factors:1. The client lacks sufficient working capital to continue…

A: 1. The first risk factor of client lack of working capital is related to Acceptable audit risk. 2.…

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.