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Risk is communicated in the audit report as:
The concept of reasonable assurance is used to guide the auditor when assigning and assessing risk in the audit process.
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Risk of material misstatement exists at:
The risk of misstatement appears at the transactional level as well as the financial statement level. The statements can be materially misstated in the aggregate based on a series of misstated transactions or on the whole.
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Inherent risk is defined as:
Inherent risk is defined as risk that exists outside the audit process. It is sometimes termed industry risk.
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The objective of performing analytical procedures in planning an audit is to identify the existence of:
The objective of performing analytical procedures during planning is to discover unusual transactions or events that may have an impact on the planning of the financial statement audit.
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An auditor compared the current year gross margin with the prior year gross margin to determine if the cost of sales is reasonable. What type of audit procedure was performed?
Analytical procedures are evaluations of financial information made by a study of plausible relationships among data and they include comparisons between the current year and prior year's financial information.
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If the management of a company with recently audited financial statements refuses to make a revision to the statements as a result of a material inconsistency, the auditor should __________.
An auditor may modify the opinion of his or her audit if management refuses to correct a material issue, or withdraw from the engagement altogether.
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