If the auditor decides to reduce acceptable audit risk, planned detection risk
A) increases.
B) decreases.
C) stays the same.
D) cannot be determined.

Question

Quizplus · Accepted Answer

Planned detection risk is directly related to acceptable audit risk and inherent risk. When acceptable audit risk is reduced, planned detection risk must be decreased to achieve the desired level of overall audit risk. Therefore, the correct answer is B, planned detection risk decreases.

If the Auditor Decides to Reduce Acceptable Audit Risk, Planned