Increased fraud risk could result in all of the following except:
A) Lower detection risk.
B) Higher inherent risk.
C) Lower control risk.
D) Higher client risk.

Question

Quizplus · Accepted Answer

Increased fraud risk would generally result in higher inherent and client risk, meaning that there is a greater likelihood of material misstatements in the financial statements, and that the client is a higher risk of committing fraud. Additionally, the auditor may need to perform more substantive procedures to detect or prevent fraud, which could result in lower detection risk. However, the control risk would not decrease in response to increased fraud risk, as there may be a higher likelihood of control failures or weaknesses that could allow fraud to occur.

Increased Fraud Risk Could Result in All of the Following