The auditor uses the assessed level of risk of material misstatement to determine the acceptable level of detection risk for financial statement assertions. As the acceptable level of detection risk decreases, the auditor may do one or more of the following except change the:
A)nature of substantive tests to more effective procedures.
B)timing of substantive tests, such as performing them at year-end rather than at an interim date.
C)extent of substantive tests, such as using larger sample sizes.
D)assurances provided by substantive tests to a lower level.

Question

Quizplus · Accepted Answer

The auditor cannot change the level of assurance provided by substantive tests to a lower level, as this would not be in compliance with auditing standards. The auditor must maintain a sufficient level of assurance to provide a reasonable basis for the opinion issued on the financial statements. Therefore, the correct option is D.

The Auditor Uses the Assessed Level of Risk of Material