When an auditor increases the assessed level of control risk because certain control procedures were determined to be ineffective,the auditor would most likely increase the:
A)Extent of tests of controls.
B)Level of dete procedures.
C)Level of inherent risk.

Question

Quizplus · Accepted Answer

When the auditor determines that control procedures are ineffective, it means that the risk of material misstatement is higher. This indicates a higher level of inherent risk in the audit. Therefore, the auditor is likely to increase the level of inherent risk to compensate for the deficiencies in the control procedures. This would result in an overall increase in the level of audit risk and would require the auditor to perform more substantive procedures to obtain sufficient evidence. Thus, choice A) and B) are incorrect.

When an Auditor Increases the Assessed Level of Control Risk