If the upper limit rate of deviation exceeds the tolerable rate of deviation,the auditor would most likely:
A)Accept the account balance as fairly stated.
B)Reject the account balance as fairly stated.
C)Increase the planned effectiveness of substantive procedures.
D)Not increase the planned effectiveness of substantive procedures.

Question

Quizplus · Accepted Answer

If the upper limit rate of deviation exceeds the tolerable rate of deviation, it indicates an increased risk of material misstatement. Therefore, increasing the planned effectiveness of substantive procedures (such as increasing sample size or selecting more reliable audit evidence) would be necessary to gather sufficient evidence to assess the account balance fairly. Accepting or rejecting the account balance without taking corrective measures would not be appropriate.

If the Upper Limit Rate of Deviation Exceeds the Tolerable