As the acceptable level of detection risk decreases, an auditor may change the:
A) timing of substantive tests by performing them at an interim date rather than at year-end.
B) nature of substantive tests from less effective to more effective procedures.
C) timing of tests of controls by performing them at several dates rather than at one time.
D) assessed level of inherent risk to a higher amount.

Question

Quizplus · Accepted Answer

As the acceptable level of detection risk decreases, the auditor may need to perform more effective procedures to increase the assurance obtained from the procedures. This may involve a change in the nature of substantive tests from less effective to more effective procedures to obtain sufficient evidence. The timing of tests of controls and substantive tests may also change, but the assessed level of inherent risk would not necessarily increase as a result.

As the Acceptable Level of Detection Risk Decreases, an Auditor