In an audit area that has a lower inherent risk, it would be prudent to:
A) expand planning procedures.
B) increase the tolerable misstatement for the area.
C) assign more experienced staff to that area.
D) increase the amount of audit evidence gathered.

Question

Quizplus · Accepted Answer

In areas with lower inherent risk, auditors can accept a higher level of tolerable misstatement because the likelihood of a significant error or fraud is lower. This approach allows auditors to allocate resources more efficiently to areas of higher risk.

In an Audit Area That Has a Lower Inherent Risk