SOLVED

3) When designing tests of controls and substantive tests an auditor is gathering evidence to satisfy the transaction related audit objectives. What are the four steps the auditor would normally follow to reduce assessed control risk? 4) What are the four steps auditors follow when they plan to reduce assessed control risk? 5) Discuss the relationship of each of the following to the extent of planned tests of details of balances: (1) tolerable misstatement, (2) inherent risk, (3) control risk, and (4) acceptable audit risk. 6) Auditing standards require a written audit program. A) True B) False 7) When designing an audit program for tests of details of balances, the auditor should make assumptions about inherent risk and control risk, and predictions concerning the outcome of tests of controls, substantive tests of transactions, and analytical procedures. A) True B) False 8) When testing details of balances, most audit procedures satisfy only one balance-related objective, but more than one audit procedure should be used to test each objective. A) True B) False 9) Substantive tests of transactions and control tests are often conducted simultaneously. A) True B) False 10) Auditing standards require that tests of controls be performed on every audit engagement. A) True B) False