On the basis of audit evidence gathered and evaluated, an auditor decides to increase the assessed level of control risk from that originally planned. To achieve an overall audit risk level that is substantially the same as the planned audit risk level, the auditor would ________.
A) decrease substantive testing
B) decrease detection risk
C) increase inherent risk
D) increase materiality levels

Question

Quizplus · Accepted Answer

If the assessed level of control risk is increased, the auditor needs to use substantive testing to obtain sufficient appropriate audit evidence. To achieve an overall audit risk level that is substantially the same as the planned audit risk level, the auditor should decrease detection risk to maintain the same level of overall audit risk. This can be achieved by increasing the level of substantive testing. Therefore, the best choice is to decrease detection risk by increasing substantive testing. Choice A is incorrect because decreasing substantive testing would result in a higher overall audit risk level, which is not desired. Choice C is incorrect because increasing inherent risk would also result in a higher overall audit risk level. Choice D is incorrect because increasing materiality levels would result in a lower overall audit risk level, which is not desired.

On the Basis of Audit Evidence Gathered and Evaluated, an Auditor