STATE WHETHER THE STATEMENT IS TRUE OR FALSE

statement QUESTION 2 STATE WHETHER THE STATEMENT IS TRUE OR FALSE: Statement/Question (13 MARKS) I. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Preliminary engagement activities are conducted to determine whether to establish or continue with an auditor/client relationship. The Audit fee is not a term & condition that forms part of the engagement Letter. The Audit Plan is made of 3 components: Nature, Timing and Purpose of tests Stricter materiality limits set by the auditor will result in more testing It can be said that control risk and inherent risk relate to risk identification and assessment, detection risk can be said to relate to responding to assessed risk. Collusion and management override are regarded as factors which increase control risk. Gaining an understanding of the business risk faced by a client is not an important objective for the auditor when conducting risk a;sessment procedures. Where significant risks are identified, testing can be limited to anafytical procedures but those must be extensive. Irrespective of the assessed risk of material misstatement, the auditor must design and perform substantive test for each material class of transaction, and account balance. At the audit of an extensive computerized client, the external auditor cannot delay the timing of the audit to suit the availability of the client's information technology manager as it will impair the independence of the audit. Stricter materiality limits set by the auditor will result in more testing. The decision to make use of the client's internal audit department will be made when determining the overall audit strategy When we as auditors want to rely on the work of an Expert, assessing his/her competence is one of the first procedures we would have to carry out. Option True/False True/False True/False True/False True/Fatse True/False True/Fatse True/F alse True/Fatse True/False True/False True/FaIse True/False