While performing a substantive test of details during an audit, the auditor determined that the sample results supported the conclusion that the recorded account balance was materially misstated. Which of the following is the least likely auditor reaction to this discovery?
A) perform expanded audit tests in the relevant areas
B) increase detection risk in the relevant areas
C) increase the sample size
D) take no action until tests of other audit areas are completed

Question

Quizplus · Accepted Answer

Increasing detection risk in the relevant areas is the least likely auditor reaction to the discovery of a material misstatement in the recorded account balance. Increasing detection risk means that the auditor is willing to accept a higher risk of not detecting material misstatements, which is not an appropriate response to a significant finding that the recorded account balance is materially misstated. The auditor should perform expanded audit tests in the relevant areas or increase the sample size to obtain sufficient evidence about the accuracy of the account balance. Taking no action until tests of other audit areas are completed is also not a recommended approach, as it could lead to delayed identification and correction of material misstatements.

While Performing a Substantive Test of Details During an Audit