John and Caroline, two audit staff associates assigned to the audit of King Enterprises are discussing audit risk. As newly-hired employees, both John and Caroline are keen to understand more about this area and how it pertains to their jobs with the firm. Which of the following statements most accurately describes audit risk?

Which of the following statements are true regarding internal controls?

Which of the following best describes the relationship between the system of internal control and audit evidence generated by the client?

Internal control is extremely important to any organization with respect to its optimal functioning and operational/financial performance. Which of the following statements most accurately encapsulates a firm’s system of internal control?

Madison and Johnnie, two audit staff associates, are eating lunch one day in the client’s cafeteria. They overhear a couple of the employees talking about accounts receivable and the firms’ credit sales in general. What might be some risks associated with this area, and to what assertions might they be tied?

What is a tolerable deviation rate and how is it connected to the client’s internal control audit?

Auditors are required to obtain a sufficient understanding of an entity’s internal control. This understanding is required by the performance principle of GAAS. What are some of the goals (purposes) for conducting an evaluation of an entity’s internal control?

Considering the risk of overstatement of receivables due to premature revenue recognition that inflates revenues and receivables, which assertion for the accounts receivable balance is most relevant?

Two audit staff associates have been assigned the task of auditing the client’s revenue accounts. At the beginning of the engagement, the two staff associates are discussing how best to perform this audit, and what procedures this would most likely involve. Which of the following most accurately describes the procedures that the staff associates will use to audit these accounts?

During the initial stages of the audit of Campbell Company, a distributor of sheet metal across the southeastern United States, the audit partner with overall responsibility for the engagement has noted that management has implemented strict codes of ethics for all employees. This attitude and approach from top management would represent which of the following?