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Kim Smith.
Kim Smith.-
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Noah098
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Which TWO of the following are appropriate responses to address the increased detection
risk due to Veryan Co being a new audit client?
? Extended controls testing should be performed
? Obtain an understanding of Veryan Co
? Reduce reliance on tests of controls
? Contact the previous auditor to request working papersmaam i wanted to know why “Extended controls testing should be performed” isnt one of the answers?
in context of audit, extended means “beyond reporting date”? Or it means, as i think, “detailed”?
and also maam if the 3rd option had been “reduce reliance on controls” then that would have been an appropriate response to increased detection risk?
Kim Smith
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SEE the depiction of the audit risk model in Chapter 9 – ToCs assess the operating effectiveness of controls which is the determinant of control risk which is a component of RoMM.
This is unrelated to the increase in DR that arises because the client is NEW – i.e. we didn’t audit the opening balances of the current year’s financial statements.
Noah098
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