As the acceptable level of detection risk decreases, an auditor may change the:
A)timing of tests of controls by performing them at an interim date rather than at year-end.
B)nature of substantive procedures from less effective to more effective procedures.
C)timing of tests of controls by performing them at several dates rather than at one time.
D)assessed level of risk of material misstatement to a higher amount.

Question

Quizplus · Accepted Answer

As the acceptable level of detection risk decreases, an auditor may choose to perform more effective substantive procedures instead of relying on less effective ones. This is done to reduce the risk of failing to detect material misstatements in the financial statements. The timing of tests of controls may also be adjusted, but this does not influence the nature of substantive procedures or the assessed level of risk of material misstatement.

As the Acceptable Level of Detection Risk Decreases, an Auditor