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Audit Risk Model Relationships For each of the following changes in a component of the audit risk model, determine how the other components of the audit risk model would need to be changed (Increase, Decrease, No change). Initial Change Detection Risk Audit Risk Evidence The audit team determines that inherent risk needs to be increased due to the client having new, complex financial instruments. The audit team reduces their control risk assessment due to the client strengthening their internal audit team from the prior year.     Your client underwent an IPO during the year under audit and is now listed on a public stock exchange.

The auditor’s responsibility for the detection of noncompliance with laws and regulations is greatest for laws and regulations that have:

(Please use the bank reconciliation information above as a reference for this question.) What is the total amount of deposits in transit as of October 31st?

Which of the following statements concerning audit evidence is true?

The ultimate purpose of understanding the entity and its environment and assessing inherent risk and control risk is to contribute to the auditor’s assessment of the risk that:

Audit Evidence For each audit procedure below:a)    Determine which type of evidence the auditor gatheredb)    Determine what management assertion is tested by the evidence described  Audit Procedure Evidence Assertion Question operating personnel about the possibility of obsolete or slow-moving inventory. Send letters directly to suppliers for information about inventory held by the client that is on consignment. Select a sample of quantities of inventory in the factory warehouse and trace each item to the inventory count sheet to determine if it has been included. Tour the company’s production facility and find a selection of items from the fixed asset register in the facility. Develop an expectation for plant electricity expense based on number of machines and average machine hours per work day. Compare your expectation to the recorded electricity expense to ensure they client has recorded enough expense. Trace a transaction from the sales journal to the general ledger. Watch a billing specialist match a purchase order, sales order, shipping records before creating an invoice.

As part of the current audit engagement, the auditor reviews equipment purchases and dispositions made by the client fifteen days before and fifteen days after year-end. This procedure would be used to test which of the following assertions?

Types of Audits Determine what type of audit is described in each of the following scenarios. Answer options may be used more than once or not at all.

The three basic requirements for becoming a CPA in most states are:

Extra Credit As an auditor, building rapport is an important aspect to client relationship management. As a result, it’s always a good idea to commit information about your client to memory in order to demonstrate your concern for them as a person above and beyond your concern for them as a client. A) On the first day of class, and on a couple occasions since, I have mentioned my husband’s name. What is it? (2 points possible)  B) If you’re not sure on part (a), please list one detail you took note of regarding my personal life (2 points possible)