The assessed risk of material misstatement influences audit decisions about audit procedures. Which of the following decisions is more appropriate when the risk of material misstatement is assessed as low rather than when it is assessed as high?
A) Performing audit procedures at the balance sheet date.
B) Performing audit procedures on a larger proportion of the population.
C) Obtaining audit evidence primarily with substantive tests.
D) Including the most experienced individuals on the audit team.
E) Choosing substantive audit procedures that provide less persuasive evidence when considering benefits and costs.

Question

Quizplus · Accepted Answer

When the risk of material misstatement is assessed as low, auditors may opt for substantive audit procedures that provide less persuasive evidence, considering the benefits and costs. This approach is based on the rationale that a lower risk assessment supports the expectation of fewer errors, thus less persuasive evidence may still be sufficient for the auditor's purposes.

The Assessed Risk of Material Misstatement Influences Audit Decisions About