Multiple choice questions

What are the two elements of the ride of material misstatement at the assertion level? A Inherent risk and detection risk B Audit risk and detection risk C Inherent risk and control risk D Detection risk and control risk 'Audit risk' represents the risk that the auditor will give an inappropriate opinion on the financial statements when the financial statements are materially misstated. Which of the following categories of risk can be controlled by the auditor? Category of risk: Control risk Detection risk Sampling risk A (1) and (2) B (2) only C (1) and (3) D (2) and (3) Which of the following must be included in an audit engagement letter? A Arrangements concerning the use of experts B Obligations to make audit working papers available to other parties C Expected form and content of any reports D Basis on which fees are computed Application controls relate to procedures used to initiate, record, process and report transactions and other financial data. Which two of the following are application controls? Records of program changes Virus checks Batch reconciliations Document counts A (1) and (2) B (1) and (4) C (2) and (3) D (3) and (4) A control objective of the purchases system of D Co is to ensure that all liabilities for purchases are valid obligations of the company. Which of the following control activities would help to ensure that this objective is achieved? A Reconciliation of the payables control account to the purchase ledger B Matching of suppliers' invoices to purchase orders and goods received notes C Checking of the mathematical accuracy of the supplier invoice D Sequential numbering of goods received notes