It is acceptable under generally accepted auditing standards for an audit team to
A) Assess risk of material misstatement at high and achieve an acceptably low audit risk by performing extensive detection work.
B) Assess control risk at zero and perform a minimum of detection work.
C) Assess inherent risk at zero and perform a minimum of detection work.
D) Decide that audit risk can be 40 percent.

Question

Quizplus · Accepted Answer

According to generally accepted auditing standards, the audit team should assess the risk of material misstatement and plan audit procedures to achieve an acceptably low audit risk. However, it is acceptable for the audit team to perform extensive detection work if the risk of material misstatement is assessed as high. Therefore, option A is the best choice as it follows the standards. Options B and C have zero risk assessments which are not realistic or acceptable. Option D is also not acceptable as the audit risk should be reduced to an acceptably low level.

It Is Acceptable Under Generally Accepted Auditing Standards for an Audit