Auditors frequently refer to the terms audit assurance, overall assurance, and level of assurance to refer to ________.
A. detection risk
B. audit report risk
C. acceptable audit risk
D. inherent risk
If an auditor believes the chance of financial failure is high and there is a corresponding increase in business risk for the auditor, acceptable audit risk would likely:
A. be reduced
B. be increased.
C. remain the same.
D. be calculated using a computerized statistical package.
If it is probable that the judgment of a reasonable person will be changed or influenced by the omission or misstatement of information, then that information is, by definition of FASB Statement No. 2:
When auditors allocate the preliminary judgment about materiality to account balances, the materiality allocated to any given account balance is referred to as:
A. the materiality range.
B. the error range.
D. tolerable misstatement.
When the auditor is attempting to determine the extent to which external users rely on a client’s financial statements, they may consider several factors except for:
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