If inherent risk is increased to medium from low, tests of details of balances can be reduced.

Name: If inherent risk is increased to medium from low, tests of details of balances can be reduced.
Brand: Quizplus
Rating: 4.8 (36 reviews)

Question

Quizplus · Accepted Answer

If inherent risk is increased from low to medium, it means that there is a higher likelihood of material misstatements in the financial statements. Therefore, tests of details of balances should not be reduced, but instead, they should be increased to mitigate the higher inherent risk.

If Inherent Risk Is Increased to Medium from Low, Tests