State two inherent risk factors that might motivate management to deliberately misstate revenues and receivables and two factors that might cause unintentional misstatements.
Solution Preview
Inherent risk is the risk that a portion of audited financials are materially misstated assuming internal control procedures do not in place to prevent the risk.
Two inherent risk factors that might motivate management to deliberately misstate revenues and receivable include:
1) Motivation to ...
Solution Summary
Inherent risk is the risk that a portion of audited financials are materially misstated assuming internal control procedures do not in place to prevent the risk. The solution states two inherent risk factors that might motivate management to deliberately misstate revenues and receivables and two factors that might cause unintentional misstatements.
Evaluating Risk Factors
The risk of material misstatements is of concern in planning the audit of the Anthony's Orchard financial statements for the year ending December 31, 2009. Anthony's Orchard is a publicly traded firm that is on the NASDAQ. Anthony's Orchard has customers in the United States and has growing orchards in
Based on the information presented in the application form linked below, determine whether the factors are likely to increase, decrease, or have no effect on the risk of material misstatement. Do these factors indicate inherentrisk or control risk? In the provided fields in the application form, mark your answers as Yes (Y) or
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Please discuss the following question and use an example if possible.
Question: Define control riskand explain the role of control risk assessment in audit planning.
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Be sure to substantiate your findings by reviewing Statements on Aud
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