Because control risk and inherent risk vary from cycle to cycle, account to account, or objective to objective,
A) audit risk must also change.
B) planned detection risk and required audit evidence will also vary.
C) planned detection risk will vary but audit evidence will remain constant.
D) planned detection risk will remain constant but audit evidence will vary.

Question

Quizplus · Accepted Answer

Planned detection risk and required audit evidence will vary based on the level of control risk and inherent risk present in each cycle/ account/ objective. As the level of control risk and inherent risk increases, the auditor must decrease planned detection risk and increase the required audit evidence to lower the overall audit risk to an acceptable level. Therefore, the answer is B.

Because Control Risk and Inherent Risk Vary from Cycle to Cycle