When detection risk is very low, the auditor should: A) scan the client's bank reconciliation and verify the mathematical accuracy of the reconciliation. B) review the client's bank reconciliation. C) prepare the reconciliation from data in the client's possession. D) prepare the reconciliation from information obtained directly from the bank. E) prepare the proof of cash from data in the client's possession.

Question

Quizplus · Accepted Answer

When detection risk is very low, the auditor seeks to minimize the risk that material misstatements will not be detected. This often involves obtaining evidence directly from independent sources, hence preparing the reconciliation from information obtained directly from the bank (D) is the most thorough approach.

When Detection Risk Is Very Low, the Auditor Should