If the auditor's assessment of audit risk is low (e.g., 1% rather than 5%), what is the effect on the amount of direct testing performed by the auditor?
A) Increase in direct testing.
B) Decrease in direct testing
C) No change in direct testing.
D) Direct testing is not needed.

Question

Quizplus · Accepted Answer

When the auditor's assessment of audit risk is low, they need to perform more direct testing to gather sufficient evidence to support the low risk assessment and ensure the financial statements are free of material misstatement.

If the Auditor's Assessment of Audit Risk Is Low (E