PICPA NMMC QAR Audit Methodology Workshop Part 1

Audit Risk includes all except:

• Inherent Risk

• Business Risk

• Control Risk

• Detection Risk

Performance Materiality is the amount set by the auditor at more than the FS Materiality as a whole to reduce to an acceptably low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the FS as a whole

• True

• False

Risk that the auditor gives an inappropriate Audit Opinion on the Financial Statements

• Audit Opinion Risk

• Audit Risk

• Detection Risk

• Opinion Risk

What kind of relationship does Audit Risk and Materiality have?

• Linear

• Parallel

• Inverse

• Polar

It is a resource intented for use by all auditors and audit firms which are designed to guide auditor through the requirements of PSA.

• Audit Risk

• Audit Manual

• Audit Plan

• Audit Methodology

Which is not part of Audit Manual sections?

• Planning and Control

• Detailed Procedures

• Review and Completion

• Finalization

Audit Procedure made which highlight the impact on current period audit including consideration of any unexpected ratios or variances which could be indicative of fraud.

• Risk Assessment

• Risk Analysis

• Analytical Procedure

• Substantive Testing

Non-Audit Fees that are in excess of ____ times of audit fee is consider a self-interest threat?

Statement 1: ISQM 1 strengthens firms' systems of quality management through a robust, proactive and effective approach to quality management.

Statement 2: ISA 220 pertains to auditing standards on Quality Management for an Audit of Financial Statements

• Statement 1 is True, Statement 2 is False

• Statement 1 is False, Statement 2 is True

• Both Statements are True

• Both Statements are False

Threats to independence includes the following except:

• Adverse Effect Threat

• Familiarity Threat

• Self-Interest Threat

• Undue Influence Threat