ACC 403 Final Exam 1 Chp. 9-13 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: The preliminary judgment about materiality and the amount of audit evidence accumulated are ________ related. Auditors generally allocate the preliminary judgment about materiality to the: Auditors are ________ to document the known and likely misstatements in the financial statements under audit. An auditor who audits a business cycle that has low inherent risk should: When one material weakness is present at the end of the year, management of a public company must conclude that internal control over financial reporting is: An audit procedure that would most likely be used by an auditor in performing tests of control procedures in which the segregation of functions and that leaves no “audit” trail is: Which of the following is responsible for establishing a private company’s internal control? Internal controls normally include procedures designed to provide reasonable assurance that: Internal controls: Financial statement manipulation risk is arguably present for all companies’ financial statements. However, the risk is elevated for companies that: Which of the following is not a factor that relates to opportunities to misappropriate assets? Two of the most useful warning signals that can indicate that revenue fraud is occurring are: In the fraud triangle, fraudulent financial reporting and misappropriation of assets: Which of the following is a factor that relates to incentives to misappropriate assets? The audit approach in which the auditor runs his or her own program on a controlled basis to verify the client’s data recorded in a machine language is: Auditors should evaluate which of the following before evaluating application controls because of the potential for pervasive effects? Which of the following is a component of general controls? General controls may include firewalls which are used to protect from: An internal control deficiency occurs when computer personnel: Analytical procedures: In the context of an audit of financial statements, substantive tests are audit procedures that: A system walkthrough is primarily used to help the auditor: Which of the following audit tests is usually the least costly to perform? Presentation and disclosure related audit objectives would be performed in which phase of the audit process?