Which of the following situations would provide auditors with a lower level of detection risk?
A) Inspecting an item rather than directly confirming the existence of that item with third parties.
B) Evaluating a smaller number of transactions or components of an account balance.
C) Relying extensively on verbal inquiry of client personnel in gathering evidence.
D) Examining an account that is more susceptible to misstatement because of complex calculations and accounting methods.

Question

Quizplus · Accepted Answer

Inspecting an item directly provides more reliable evidence than verbal inquiries or evaluating fewer transactions, thus reducing detection risk.

Which of the Following Situations Would Provide Auditors with a Lower