QUESTION 4 (18 marks) It is obvious that to gather evidence the auditor will have to carry out a number of procedures. In some instances procedures are considered collectively, e.g. "risk assessment procedures" and in other instances the procedure might be a simply description which illustrates the type of procedure, e.g. observation. YOU ARE REQUIRED TO: (a) explain the term "risk assessment procedures" in the context of auditing. (b) explain the term "further audit procedures". (2) (2) (3) (c) briefly describe the seven types of audit procedure for obtaining audit evidence. (7) (d) explain the difference between tests of controls and substantive procedures. e) comment on whether the procedures described in (c) above will be suitable for use when the auditor is assessing the risk of material misstatement. (2) (e) comment on the following: "the most effective test of controls is observation, because the auditor himself is making the observation". (2)