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Question
Using the audit risk model, identify the relationship between the following elements. For each of the items below, highlight whether the two elements have an inverse relationship, a direct relationship, or no relationship. When considering each item, assume that the other components of the risk model remain constant.
a. Engagement Risk and Acceptable Audit Risk Inverse Direct No Relationship
b. Assessed Inherent Risk and Planned Detection Risk Inverse Direct No Relationship
c. Materiality and Amount of substantive evidence needed Inverse Direct No Relationship
d. Assessed Inherent Risk and Assessed Control Risk Inverse Direct No Relationship
e. Acceptable Audit Risk and Assessed Control Risk Inverse Direct No Relationship
f. Amount of substantive evidence collected and Achieved
Answer
This answer is hidden. It contains 178 characters.
Related questions
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For which of the following internal controls would an auditor be least likely to perform tests of internal controls closer to the "as of" date?
A. Withdrawals from Federal Bank of more than $5 million must include a manager's signature.
B. At the end of each day at Federal Bank, the total cash in the vault is reconciled with daily registers of deposits and withdrawals.
C. Federal Bank has just started establishing trusts for its customers and it has only set up ten such trusts. Before making an investment for a trust, bank employees must verify that the investment is in accordance with stated investment policies.
D. On an annual basis, Federal Bank management performs credit checks on its loan customers before determining the value of loans it will not be able to collect on.
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A. S&H must still assume that management has assessed the effectiveness of internal control.
B. Depending on other factors in the audit, S&H can still issue an unqualified opinion.
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During consideration of internal control in a financial statement audit of a nonpublic company, an auditor is not obligated to
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In obtaining an understanding of an entity's internal control in a financial statement audit of a nonpublic company, an auditor is not obligated to
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