Recap Staff 2 - D3

Which of the following is NOT a method to test control?

• Inquiry
• Observation
• Inspection
• Validation

Which option is not recommended to appropriately document control attributes?

• Understand if the control is performed by an IT application or an individual or both
• Design additional compensation control to address to risk
• Understand what the objective of the control is

We perform test of controls:

• In every audit
• When we intend to rely on controls
• When we access that controls are effective and therefore can reduce substantive procedures

If we use control-reliance approach to a SCOTs, we:

• We test relevant controls to address each WCGW for each relevant assertion
• We test all controls designed within that SCOT
• We test selected controls based on professional judgement

Which is not an action to take if we discover errors in a test of controls sample?

• Make specific inquiries and investigate the nature and cause of the exception
• Waive the control-reliance strategy and return to substantive approach
• Reconsider our assessment of the risk associated with the control

IPE risks can be addressed by?

• Testing controls over the creation of the IPE
• Substantively testing the IPE
• Using a combination of tests of controls and substantive testing
• All are correct

What is not IPE risk?

• Data process create the incomplete, inaccurate data
• EUC tool is broken in the transfer
• Data is modified or lost in the transfer
• The data extracted is not intended data

Which of the following is not part of the audit risk model?

• Control risk
• Inherent risk
• Detection risk
• Entity Level Control Risk

What elements should we assess of an inherent risk of material misstatement?

• A. Magnitude of misstatement
• B. Accounts to which the risk is related
• C. Likelihood of occurrence
• D. Both A&B
• E. Both A&C

Inherent risk decides size of the "bucket of evidence", while control risk decides how the bucket is filled before substantive procedures

• True
• False