MCQs Review

Question 1

Before applying principal substantive tests to an entity’s account receivable at an interim date, an auditor should:

Answer 1

Access the difficulty in controlling the incremental audit risk.

Question 2

Holding other planning considerations equal, a decrease in the amount of misstatements in a class of transactions that an auditor could tolerate most likely would cause the auditor to:

Answer 2

Modify the nature, timing and/or extend of auditing procedures.

Performing the planned procedures closer to the balance sheet date is a timing modification that address this change.