Because control risk and inherent risk vary from cycle to cycle, account to account, or objective to objective:
A) detection risk will vary, but audit evidence will remain constant.
B) detection risk and required audit evidence will also vary.
C) acceptable audit risk must remain a constant.
D) detection risk will remain constant, but audit evidence will vary.

Question

Quizplus · Accepted Answer

Detection risk and required audit evidence will also vary because they are inversely related to control risk and inherent risk. As control risk and inherent risk increase, detection risk must decrease to maintain a low overall audit risk. Thus, the auditor must gather more and higher quality audit evidence to achieve the desired level of assurance when control risk and inherent risk are high.

Because Control Risk and Inherent Risk Vary from Cycle to Cycle