When there is a significant risk that an account will be misstated and the client's system of internal controls is not considered effective at reducing that risk,
A) less high quality evidence is gathered when conducting substantive tests.
B) detection risk is set as high.
C) detection risk is set as low.
D) none of the above

Question

Quizplus · Accepted Answer

When there's a significant risk of misstatement and the client's internal controls are ineffective, auditors set the detection risk as low. This means they will gather more high-quality evidence through substantive testing to compensate for the higher risk and ineffective controls.

When There Is a Significant Risk That an Account Will