Increasing the effectiveness of auditing software will
A)reduce detection risk.
B)reduce control risk.
C)increase detection risk.
D)increase control risk.

Question

Quizplus · Accepted Answer

Auditing software is used to detect errors and frauds in the financial statements. By increasing the effectiveness of the auditing software, the auditor can reduce the detection risk which is the risk of not detecting material misstatements in the financial statements. As a result, the auditor can provide a higher level of assurance to the users of the financial statements. Reducing control risk is the responsibility of the management and the auditor's job is to assess the control risk. Therefore, reducing control risk is not directly related to the effectiveness of auditing software. Increasing the effectiveness of auditing software will not increase the control risk or detection risk.

Increasing the Effectiveness of Auditing Software Will