If acceptable audit risk is increased, ARIA should be:
A) unaffected.
B) reduced.
C) increased.
D) modified.

Question

Quizplus · Accepted Answer

When the acceptable audit risk is increased, it means the auditor is willing to take on more risk that the financial statements may be materially misstated without detecting such misstatement. As a result, the auditor may decide to increase the assessed risk of material misstatement (ARIA) to align the audit approach with the higher level of acceptable audit risk.

If Acceptable Audit Risk Is Increased, ARIA Should Be