By setting high detection risk, an auditor will
A) eliminate the possibility that fraud will be detected.
B) reduce the level of reliance placed on their detailed substantive procedures.
C) increase the level of reliance placed on their detailed substantive procedures.
D) reduce the level of testing of the client's internal control system.

Question

Quizplus · Accepted Answer

By setting high detection risk, the auditor is essentially accepting a higher risk that material misstatements may exist in the financial statements without being detected. This means that the auditor will have to perform more substantive procedures to be able to detect any potential misstatements, reducing the level of reliance they can place on the client's internal control system. Therefore, the auditor will need to reduce the level of reliance placed on their detailed substantive procedures, hence Option B is the best answer.

By Setting High Detection Risk, an Auditor Will