Questions from Auditing and Assurance

Q: What is meant by planned detection risk? What is the effect

What is meant by planned detection risk? What is the effect on the amount of evidence the auditor must accumulate when planned detection risk is increased from medium to high?

Q: Assume that Rosanne Madden, CPA, is using 5% of

Assume that Rosanne Madden, CPA, is using 5% of net income before taxes, current assets, or current liabilities as her major guidelines for evaluating materiality. What qualitative factors should she...

Q: Beds and Spreads, Inc. specializes in bed and bath furnishings

Beds and Spreads, Inc. specializes in bed and bath furnishings. Its inventory system is linked through the Internet to key suppliers. The auditor identified the following internal controls in the inve...

Q: Following are evidence decisions for the three audits described in Figure 3

Following are evidence decisions for the three audits described in Figure 3-3 Figure 3-3 Audit A Ineffective client internal controls Audit B Very effective client internal controls Audit C Somewhat e...

Q: A considerable portion of the tests of controls and substantive tests of

A considerable portion of the tests of controls and substantive tests of transactions are performed simultaneously as a matter of audit convenience. But the substantive tests of transactions procedure...

Q: Following are several decisions that the auditor must make in an audit

Following are several decisions that the auditor must make in an audit of a nonpublic company. Letters indicate alternative conclusions that could be made. Required a. Identify the sequence in which...

Q: Define each of the following terms: a. Acceptable risk

Define each of the following terms: a. Acceptable risk of assessing control risk too low (ARACR) b. Computed upper exception rate (CUER) c. Estimated population exception rate (EPER) d. Sample excepti...

Q: The following are three situations, all involving nonpublic companies, in

The following are three situations, all involving nonpublic companies, in which the auditor is required to develop an audit strategy: 1. The client has inventory at approximately 50 locations in a thr...

Q: Describe accounting requirements for proper recording of sales returns and allowances.

Describe accounting requirements for proper recording of sales returns and allowances.

Q: Kim Bryan, a new staff auditor, is confused by the

Kim Bryan, a new staff auditor, is confused by the inconsistency of the three audit partners she has been assigned to on her first three audit engagements. On the first engagement, she spent a conside...