On the basis of attributes sampling,an auditor decided to increase the assessed level of control risk from the level originally planned.To achieve an overall audit risk level that is substantially the same as the original planned level of audit risk,the auditor would
A) increase inherent risk.
B) increase overall materiality levels.
C) decrease substantive procedures.
D) decrease detection risk.

Question

Quizplus · Accepted Answer

Increasing the assessed level of control risk means that the auditor perceives a higher risk that internal controls will not prevent or detect material misstatements. To maintain the same level of overall audit risk, the auditor must then decrease detection risk, which is the risk of failing to detect material misstatements during substantive testing. This involves increasing the extent or effectiveness of substantive procedures, which would reduce the risk of missing any material misstatements that may have slipped through the weakened controls. Increasing inherent risk or overall materiality levels would not compensate for the increased level of control risk.

On the Basis of Attributes Sampling,an Auditor Decided to Increase