When the auditor identifies risk at the assertion level,
A) the auditor may need to obtain audit evidence that is more reliable and relevant.
B) the auditor may choose to conduct substantive testing during interim periods rather than at the end of the period.
C) the auditor may decrease the sample size.
D) both a and b

Question

Quizplus · Accepted Answer

When the auditor identifies risk at the assertion level, it indicates that there is a higher likelihood that the financial statements' assertions may be materially misstated. To address this, the auditor may need to obtain audit evidence that is more reliable and relevant to reduce the risk of material misstatement. Therefore, choice A is the best option. While choice B is also possible, it may not always be practical or sufficient to address the identified risks. Choice C is not a viable option since reducing the sample size may not necessarily address the increased risk of material misstatement.

When the Auditor Identifies Risk at the Assertion Level