Settlement of Audit Objections

reduce inherent risk

identify problem areas

evaluate reasonableness of estimates

evaluate appropriates of GAAP

the amount has been deposited in a separate bank account

deposited with the cashier

held in a safe deposit box

All of these

understanding of the system

understanding of fraud risk factors

documentation of assessment of control risk

Both (a) and (c)

Projected error

Tolerable error

Expected error

Both a and c

Accuracy

Classification

Completeness

Existence

there are no material misstatements due to fraud or error in financial statement

accounting system is well documented

Written evidence is there to support transactions

if internal control is effective

Statutory and private audit

Government and continuous audit

Continuous, final, Interim, Cash, Cost and Management audit

None of these

cost accounting system

internal control system

legal compliance

accounting system

Commission earned

Bad debts recorded

Credit sales

Sales of scrap

Does not support the auditor’s planned assessed level of control risk when the true operating effectiveness of the control structure justifies such an assessment

Supports the auditor’s planned assessed level of control risk when the actual position does not warrant such reliance

Is not supported by adequate documents

Both A and C