If control risk increases, and all other risks in the audit risk model stay constant except the one referred to below, which of the following statements is correct?
A)Detection risk will decrease.
B)Inherent risk will increase.
C)Audit risk will decrease.
D)Detection risk will increase.

Question

Quizplus · Accepted Answer

When control risk increases, auditors believe that the client's internal controls are less effective at preventing or detecting misstatements. To maintain the same level of overall audit risk, auditors will decrease detection risk by performing more substantive testing or using more reliable evidence. This compensates for the higher control risk, ensuring that the total audit risk does not increase.

If Control Risk Increases, and All Other Risks in the Audit