Which of the following statements about preliminary assessment of control risks is correct?Select one:a.The preliminary assessment of control risk can be done only after completing tests of controls.b.The auditor ordinarily assesses control risk at high level for some or all assertions when it is not cost efficient to do tests of controls.c.The preliminary assessment of control risk for a financial assertion is normally low, unless the auditor is able to identify weaknesses that may indicate ineffectiveness of accounting and internal control system.d.After obtaining an understanding of the accounting and internal control systems, the auditor should make a preliminary assessment of control risks, at the assertion level, for all accounts or transaction classes.

Which of the following statements concerning control risk is correct?Select one:a.When control risk is at the maximum level, an auditor is required to document the basis for that assessment.b.Control risk may be assessed sufficiently low to eliminate substantive testing for significant transaction classes.c.When assessing control risk, an auditor should not consider evidence obtained in prior audits about the operation of controls.d.Assessing control risk and obtaining an understanding of an entity's internal control may be performed concurrently.

The auditor should consider whether the assessment of control risk is confirmedSelect one:a.Before the final audit program is completed.b.Upon completion of understanding of internal control.c.Upon the conclusion of the audit, based on the results of substantive procedures and other audit evidence obtained.d.Upon completion of tests of controls

The likelihood of assessing control risk too low is the risk that the sample selected to test controlsSelect one:a.Contains misstatements that could be material to the financial statements when aggregated with misstatements in other account balances.b.Contains proportionately more deviations from prescribed internal control policies or procedures than exist in the population.c.Does not support the tolerable misstatement for some or all of management's assertions.d.Does support the auditor's planned assessed level of control risk when the true operating effectiveness of the control does not justify such an assessment.

If the results from tests of controls demonstrate that the internal controls are operating effectively, how will the auditor assess the levels of control risk and detection risk? Question 11Answer a. The level of control risk will be assessed as low. To achieve an acceptable level of audit risk the auditor can accept a lower level of detection risk. b. The level of control risk will be assessed as higher. To achieve an acceptable level of audit risk the auditor can accept a lower level of detection risk. c. The auditor determines that the internal controls are operating effectively, the level of control risk will be assessed as low. To achieve an acceptable level of audit risk the auditor can accept a higher level of detection risk. d. The level of control risk will be assessed as high. To achieve an acceptable level of audit risk the auditor can accept a higher level of detection risk.

Refer to the components of Internal Controls. Which of the following statement is correct about risk assessment:Question 6AnswerSelect one:a.ideally should be done from the auditing perspectiveb.involves asking what could go wrong to address financial reporting risksc.is a continuous processd.all of the options are correct