Which of the following is true regarding audit risk for segments?
A) Control risk must be assessed at the same level for all accounts.
B) Factors affecting inherent risk do not differ from account to account.
C) Acceptable audit risk is ordinarily assessed by the auditor during the substantive test of balances phase and is held constant for each major cycle and account.
D) In some cases, a lower acceptable audit risk may be more appropriate for one account than for others.

Question

Quizplus · Accepted Answer

In some cases, a lower acceptable audit risk may be more appropriate for one account than for others. This is because the inherent risk and control risk factors vary from account to account, thus affecting the overall audit risk for each account differently. As such, the auditor may need to adjust the acceptable audit risk level accordingly to ensure that the risk of material misstatement is adequately addressed for each account.

Which of the Following Is True Regarding Audit Risk for Segments