Please answer all

6. Consider the following statements:

I. Conceptually, to DECREASE the level of DETECTION RISK, the auditor would do MORE substantive testing (i.e. more detail testing and/or analytical procedures).

II. Conceptually, as the assessed level of Inherent Risk INCREASES, there is MORE of a need to lower detection risk to maintain the same overall level of acceptable audit risk

. a. I is true; II is true.

b. I is true; II is false

. c. I is false; II is true.

d. I is false; II is false.

7. In class in discussing the audit risk model we considered several cases as follows [Detection Risk rounded]: Case Audit Inherent Control Detection Risk Risk Risk Risk I .05 .30 .30 .556 II .05 .30 .60 ??? What would be the required level of detection risk for case II. Compared with Case I would the auditor expect to do more or less audit work (substantive testing)? a. .278; less audit work. c. .516; less audit work. b. .278; more audit work. d. .516; more audit work. e. none of the above.

8. The risk that the auditor gives an inappropriate audit opinion refers to: a. Audit Risk. b. Control Risk. c. Detection Risk. d. Inherent Risk.

9. A company has a poorly designed system of internal controls. This would most likely relate to which part of the fraud triangle? a. Fraud. b. Incentive. c. Opportunity. d. Rationalization.

10. Which of the following accounts would NOT be part of the Revenue Process [revenue cycle]? a. Accounts receivable. b. Bad Debts expense. c. Allowance for Doubtful Accounts. d. Sales allowances and returns. e. None of the above. All are part of the revenue process [revenue cycle].