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Exercise Chapter 3 (ICAEW)

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9 views2 pages

Exercise Chapter 3 (ICAEW)

Uploaded by

trang.taggart
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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14 Audit risk can be split into three components: inherent risk, control risk B

and detection risk.


For each of the following examples, select the type of risk illustrated.

Requirements
The organisation has a high turnover of staff in the accounts department.
A Inherent
B Control
C Detection
15 Audit risk can be split into three components: inherent risk, control risk C
and detection risk.
For each of the following examples, select the type of risk illustrated.

Requirements
The auditor will be using samples in testing.
A Inherent
B Control
C Detection
16 Which two of the following would be used as part of the risk assessment A,B
to understand the entity and its environment in accordance with ISA (UK)
315 (Revised), Identifying and Assessing the Risks of Material
Misstatement?

A Industry, regulatory and other external factors


B How inherent risk factors make assertions susceptible to misstatement
C The results of tests of details
D The results of a review of events after the date of the financial
statements
17 For each of the following statements, select whether they are true or false A
in respect of the concept of materiality.

Requirements
Materiality should be calculated at the planning stage of all audits.
A True
B False
18 For each of the following statements, select whether they are true or false B
in respect of the concept of materiality.

Requirements
Once established, the materiality level initially set cannot be revised
during the course of the audit.
A True
B False
19 For each of the following statements, select whether they are true or false A
in respect of the concept of materiality.

Requirements
Materiality will influence the audit opinion given.
A True
B False
20 Audit risk can be split into three components: inherent risk, control risk B
and detection risk.
For each of the following examples, select the type of risk illustrated.

Requirements
Senior management regularly override the system of controls.
A Inherent
B Control
C Detection
21 Audit risk can be split into three components: inherent risk, control risk A
and detection risk.
For each of the following examples, select the type of risk illustrated.

Requirements
Directors’ pay is related to company profitability.
A Inherent
B Control
C Detection

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