Based on 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 auditor decides to increase the assessed level of control risk, it means that the auditor no longer trusts the effectiveness of the client's internal controls. As a result, the auditor needs to increase the level of substantive testing to obtain the same level of audit risk that was planned initially. However, according to the audit risk model, if control risk increases, we need to decrease detection risk to achieve the same level of audit risk. Therefore, the best choice in this scenario would be to decrease detection risk. This would allow the auditor to obtain more persuasive audit evidence from substantive testing, which compensates for the increased level of control risk. Increasing inherent risk and materiality levels may also have some impact, but they are not the most appropriate options in this scenario.

Based on Audit Evidence Gathered and Evaluated,an Auditor Decides to Increase