An auditor has identified a risk of material misstatement due to fraud related to the inventory function. Which is least likely to be an appropriate response?

Question

Quizplus · Accepted Answer

Choice "B" is correct. An auditor should respond to fraud risk by designing appropriate audit procedures. Requesting that management more closely monitor the inventory function does not improve the auditor's likelihood of detecting fraud. Choice "A" is incorrect. Observing inventory counts on an unannounced basis improves the likelihood that the auditor will detect fraud, since perpetrators may be caught unaware and may be less able to hide their fraudulent activities. Choice "C" is incorrect. Assigning more experienced personnel to the engagement is an appropriate response to identified risk, since more experienced personnel may be less likely to overlook a condition indicative of fraud. Choice "D" is incorrect. Requesting that inventory be counted on a date close to the end of the reporting period is an appropriate response to identified risk, since it minimizes the risk of manipulation of balances prior to the end of the reporting period.

An Auditor Has Identified a Risk of Material Misstatement Due