When an auditor decides there is higher inherent risk for an account, one potential effect is that more audit evidence will be required for that account.

Question

Quizplus · Accepted Answer

When an auditor determines that there is a higher inherent risk for an account, it means that there is a greater likelihood that material misstatements could occur. To address this risk, the auditor may need to gather more audit evidence for that account to obtain sufficient assurance that the financial statements are free from material misstatements. Therefore, the statement is true, and option A is correct.

When an Auditor Decides There Is Higher Inherent Risk for an Account