Question 1.
a) Identify and define the components of the quantified audit risk model.
b) Indicate which of these components is under the control of the auditor and indicate the relationship of this component to the other components of audit risk.
Question 2
'The auditor shall obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the auditor's opinion' - ASA 500 (ISA 500).
Identify the factors that may affect the sufficiency and appropriateness of audit evidence and briefly explain how they impact on these criteria.
Question 3.
a) Distinguish between sampling and non-sampling risk.
b) Identify and describe the four types of sampling risk that may occur in audit sampling including how they occur and how they impact an audit.
Question 4.
Define tolerable misstatement, tolerable rate of deviation and confidence level for both tests of control and substantive testing.
Question 5.
Auditor's expectations for client input during the audit engagement.
Discuss in terms of the following both the auditor's responsibility to (were appropriate) and the client's responsibilities to the auditor.
ASA210 ASA800 - Preconditions
ASA240 - Fraud Risk
ASA250 - Compliance with laws
ASA260 - Communications
ASA315 - Entity and environment
ASA450 - Misstatements
ASA502 - Litigation and claims
ASA540 - Accounting estimates
ASA540 - Related parties
ASA560 - Subsequent events
ASA570 - Going concern
ASA580 - Written representations
ASA600 - Group audits
ASA720 - Other information