1. We assess risks like acceptable audit risk and client business risk to Further understand our client 2. The the acceptable audit risk, the audit evidence is to be collected Higher, lower 3. Most of analytical procedures are performed in the Planning phase 4. A measure of how willing is the auditor to accept that the financial statement maybe materially misstated after the audit is completed and the unmodified opinion is issued Acceptable audit risk 5. In what order should the following steps occur? A. Set preliminary judgement of materiality and performance materiality 8. Understand the client's business and industry C. Perform preliminary analytical procedure D. accept the client and to perform initial audit planning O,B,C,A 6. One of the reasons that we plan an audit is To obtain sufficient evidence 7. The risk that there are material misstatement before considering internal control's effectiveness is Inherent risk 8. The the inherent risk, the audit evidence is to be collected Lower, lower 9. Profitability ratios include all of the following except Current ratio 10. Size, client complexity, team members' experience, all all this engagement Strongly impact the nature and extent of 11. The discovery of a new technology that may threat the clients core competency is an example of Client business risk 12. The remaining risk after considering the effectiveness of top management controls Residual risk 13. Year 2016's gross profit margin 30%/client's industry GPM-25% Year 2076's gross profit margin =55%/client's industry GPM=25% If you're the auditor of this client, what would you do increase the sales 14. Auditors responsibility, decline for audit completion, fees, and engagements limitation are parts of Audit engagement letters 15. To further understand that client's business, and to identify accounts that are likely to have a misstatement are the objectives of Analytical procedures 16. A detailed directions on how to perform the audit, including the nature, timing and extent of audit procedures to be undertaken by the auditor is the definition of Audit plan 17. Liquidity and debt ratios include all of the following except Return on asset 18. Year 2016's gross profit margin 30%/client's industry GPM-25% Year 2076's gross profit margin -55%/client's industry GPM-50% If you're the auditor of this client, what would you do Assume that this increase is normal and pursue with your regular audit engagement' procedures 19. Calculating ratios and analyzing the results is an example of Analytical procedures 20. If you assess the client's acceptable audit risk is 13% that means that you are j confident that the financial statement are fairly presented