It is acceptable under generally accepted auditing standards for an audit team to
a. assess inherent risk at zero and perform a minimum of detection work
b. assess control risk at zero and perform a minimum of detection work
c. decide that audit risk can be 40 percent
d. assess risk of material misstatement at high and achieve an acceptably low audit risk by performing extensive detection work
Answer: d. assess risk of material misstatement at high and achieve an acceptably low audit risk by performing extensive detection work
Auditors are not responsible for accounting estimates with respect to
a. determining the reasonableness of estimates
b. determining that estimates are adequately disclosed in the financial statements
c. determining that estimates are presented in conformity with GAAP
d. making the estimates
Answer: d. making the estimates
An audit strategy contains
a. documentation of the assertions under audit, the evidence obtained, and the conclusions reached
b. reconciliation of the account balances in the financial statements with the account balances in the client's general ledger
c. specifications of procedures the auditors believe appropriate for the financial statements under audit
d. specifications of auditing standards relevant to the financial statements being audited
Answer: c. specifications of procedures the auditors believe appropriate for the financial statements under audit
