What is the impact of the following independent factors on the elements of the audit risk model?
Question:
What is the impact of the following independent factors on the elements of the audit risk model? E.g. increase (I) / decrease (D) / no change (N)
Item | Factor | Acceptable audit risk | Inherent risk | Control risk | Planned detection risk |
1 | The auditor discovered several material misstatements in the prior year audit | ||||
2 | Based on prior year tests, the auditor decides to place more reliance on internal control | ||||
3 | Assessment by the auditor indicates that the client may have going concern problems | ||||
4 | The audit client conducts several material transactions with related parties | ||||
5 | The client has changed from a privately-held company to a publicly-held company | ||||
6 | This is the second year of auditing this client, and the risk assessments may now be less conservative | ||||
7 | The client does not conduct regular bank reconciliations |
Project Management The Managerial Process
ISBN: 978-1259186400
6th edition
Authors: Erik Larson, Clifford Gray