Smartbooks exam 2 Questions With
Already Solved Correctly Answers | 2025
(95questions)
Auditors should perform audits to reduce ______ risk to a sufficiently low level before
expressing an opinion on the financial statements. CORRECT ANSWERS audit
True or false: Consideration of audit risk at the financial statement level is referred to by
the term assertion. CORRECT ANSWERS false
At the assertion level, audit risk consists of______ risk, ______ risk and _______ risk.
CORRECT ANSWERS inherent
control
detection
The susceptibility of a material account or disclosure assertion to a misstatement due to
fraud or error, before considerations of any related controls is _______ risk. CORRECT
ANSWERS inherent
The risk that a material account or disclosure assertion will not be prevented, detected
or corrected on a timely basis by the entity's internal control is ________ risk.
CORRECT ANSWERS control
The possibility that an auditor will issue an unqualified opinion on materially misstated
financial statement is called ________ ____________. CORRECT ANSWERS audit
risk
Consideration of audit risk at the account balance and disclosure levels is known by the
term __________ CORRECT ANSWERS assertion
The risk that the auditor will not discover a material misstatement in the financial
statements is known as ______ risk. CORRECT ANSWERS detection
The risk of material misstatement is also referred to as_______ risk because it stems
from decisions made by the entity. CORRECT ANSWERS client
The effectiveness of the audit procedures and how well the procedures are applied by
the auditor determines the _______ risk CORRECT ANSWERS detection
The combination of inherent risk and control risk is referred to in auditing standards as
the risk of CORRECT ANSWERS material misstatements
, Audit evidence is subject to human error which is referred to as __________ risk.
CORRECT ANSWERS nonsampling
The risk that the auditor expresses an inappropriate audit opinion when the financial
statements are materially misstated is known as ______ risk. CORRECT ANSWERS
audit
The risk that the procedures performed by the auditor to reduce audit risk to an
acceptably low level will not detect a misstatement that exists exists is known as
______ risk. CORRECT ANSWERS detection
The risk that the relevant assertions related to the account balances or disclosures
contain misstatements that could be material to the financial statements consists of
______ and _____ risk. CORRECT ANSWERS control
inherent
True or false: Detection risk has an inverse relationship to inherent and control risk.
CORRECT ANSWERS True
True or false: Professional skepticism is not a way to reduce judgment errors.
CORRECT ANSWERS False
The formula for the audit risk model is ______. CORRECT ANSWERS AR = RMM x DR
If the achieved level of audit risk is greater than the planned level, auditor options
include ______. CORRECT ANSWERS performing additional audit work
modifying the audit opinion
If inherent and control risks are high, in order to achieve the planned level of audit risk,
the auditor will ______ level of detection risk. CORRECT ANSWERS set a lower
Although some control can be exercised through the careful acceptance and
continuance of clients, ________ risk cannot be directly controlled by the auditor.
CORRECT ANSWERS engagement
The use of the audit risk model ______. CORRECT ANSWERS involves considerable
auditor judgement
assists the auditor in determining the scope of audit procedures
The formula auditors use to determine the appropriate level of detection risk is ______.
CORRECT ANSWERS DR = AR / RMM
If the auditor assesses the___________ level of audit risk as being less than or equal to
the____________ level of audit risk, an unqualified report can be issued. CORRECT
ANSWERS achieved
planned
Already Solved Correctly Answers | 2025
(95questions)
Auditors should perform audits to reduce ______ risk to a sufficiently low level before
expressing an opinion on the financial statements. CORRECT ANSWERS audit
True or false: Consideration of audit risk at the financial statement level is referred to by
the term assertion. CORRECT ANSWERS false
At the assertion level, audit risk consists of______ risk, ______ risk and _______ risk.
CORRECT ANSWERS inherent
control
detection
The susceptibility of a material account or disclosure assertion to a misstatement due to
fraud or error, before considerations of any related controls is _______ risk. CORRECT
ANSWERS inherent
The risk that a material account or disclosure assertion will not be prevented, detected
or corrected on a timely basis by the entity's internal control is ________ risk.
CORRECT ANSWERS control
The possibility that an auditor will issue an unqualified opinion on materially misstated
financial statement is called ________ ____________. CORRECT ANSWERS audit
risk
Consideration of audit risk at the account balance and disclosure levels is known by the
term __________ CORRECT ANSWERS assertion
The risk that the auditor will not discover a material misstatement in the financial
statements is known as ______ risk. CORRECT ANSWERS detection
The risk of material misstatement is also referred to as_______ risk because it stems
from decisions made by the entity. CORRECT ANSWERS client
The effectiveness of the audit procedures and how well the procedures are applied by
the auditor determines the _______ risk CORRECT ANSWERS detection
The combination of inherent risk and control risk is referred to in auditing standards as
the risk of CORRECT ANSWERS material misstatements
, Audit evidence is subject to human error which is referred to as __________ risk.
CORRECT ANSWERS nonsampling
The risk that the auditor expresses an inappropriate audit opinion when the financial
statements are materially misstated is known as ______ risk. CORRECT ANSWERS
audit
The risk that the procedures performed by the auditor to reduce audit risk to an
acceptably low level will not detect a misstatement that exists exists is known as
______ risk. CORRECT ANSWERS detection
The risk that the relevant assertions related to the account balances or disclosures
contain misstatements that could be material to the financial statements consists of
______ and _____ risk. CORRECT ANSWERS control
inherent
True or false: Detection risk has an inverse relationship to inherent and control risk.
CORRECT ANSWERS True
True or false: Professional skepticism is not a way to reduce judgment errors.
CORRECT ANSWERS False
The formula for the audit risk model is ______. CORRECT ANSWERS AR = RMM x DR
If the achieved level of audit risk is greater than the planned level, auditor options
include ______. CORRECT ANSWERS performing additional audit work
modifying the audit opinion
If inherent and control risks are high, in order to achieve the planned level of audit risk,
the auditor will ______ level of detection risk. CORRECT ANSWERS set a lower
Although some control can be exercised through the careful acceptance and
continuance of clients, ________ risk cannot be directly controlled by the auditor.
CORRECT ANSWERS engagement
The use of the audit risk model ______. CORRECT ANSWERS involves considerable
auditor judgement
assists the auditor in determining the scope of audit procedures
The formula auditors use to determine the appropriate level of detection risk is ______.
CORRECT ANSWERS DR = AR / RMM
If the auditor assesses the___________ level of audit risk as being less than or equal to
the____________ level of audit risk, an unqualified report can be issued. CORRECT
ANSWERS achieved
planned
