2.5 pts When considering the internal control structure, an auditor should be aware of the concept of reasonable assurance, which recognizes that O Internal control policies and procedures may be ineffective due to mistakes in judgment and personal carelessness. Adequate safeguards over access to assets and records should permit an entity to maintain proper accountability. O Establishing and maintaining the internal control structure is an important responsibility of management. O The cost of an entity's internal control structure should not exceed the benefits expected to be derived. D Question 6 BUL3310 CH13 Flas Business Law 2, Tes 2.5 pts As the acceptable level of detection risk increases, an auditor may change the: O Assessed level of control risk from below the maximum level to the maximum level. O Timing of substantive tests from year-end to an interim date. O Assurance provided by tests of controls by using a larger sample size than planned. O Nature of substantive tests from a less effective to a more effective procedure. 2.5.nts 2.5 pts What assurance does the auditor provide that fraud and illegal acts that are material to the financial statements will be detected? Fraud Direct-effect Indirect-effect Illegal Acts Illegal Acts O Reasonable Limited Limited O Reasonable Reasonable None O Limited Limited None Reasonable Reasonable Reasonable 2.5 pts One of the axioms of auditing is that the auditor's reliance on the performance of substantive tests may properly vary with the extent of reliance on control procedures, as measured by the assessed level of control risk. Which of the following statements, if any, represents an improper interpretation of this axiom, when material financial statement dollar amounts are involved? O Rely 100% on substantive tests, 0% on internal accounting control 0 Rely 70% on substantive tests, 30% on internal accounting control O Rely 0% on substantive tests, 100% on internal accounting control. None of the above would be improper O All of the above would be improper