As the acceptable level of detection risk decreases, an auditor may change the:
A)substantive tests of details to substantive analytical procedures.
B)nature of substantive tests from less effective to more effective procedures.
C)number of tests of controls.
D)assessed level of inherent risk to a higher amount.

Question

Quizplus · Accepted Answer

As the acceptable level of detection risk decreases, the auditor may decide to change the nature of substantive tests from less effective to more effective procedures. This is because a lower acceptable level of detection risk means that the auditor needs to be more certain that they are identifying any material misstatements in the financial statements, which can be accomplished through more rigorous and effective substantive testing procedures.

As the Acceptable Level of Detection Risk Decreases, an Auditor