If inherent risk is increased from low to medium, tests of details of balances can be reduced.

Question

Quizplus · Accepted Answer

If inherent risk increases from low to medium, it means that there is now a higher likelihood of material misstatements in the financial statements. This does not mean that tests of details of balances can be reduced. In fact, it may require more extensive testing to identify and address any potential misstatements.

If Inherent Risk Is Increased from Low to Medium, Tests