If the Risk of Material Misstatement Is Low (E

question 129

Multiple Choice

If the risk of material misstatement is low (e.g., the combined inherent risk and control risk assessments are low) , _______.

• A)then the auditor does not need as much assurance from substantive tests, and the auditor can reasonably accept a lower level of assurance from substantive tests and use smaller sample sizes for substantive testing
• B)then the auditor needs more assurance from substantive tests, and the auditor can reasonably accept a higher level of assurance from substantive tests and use greater sample sizes for substantive testing
• C)then the auditor would set audit risk at the highest possible level
• D)then the auditor should consider lowering the engagement fees

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Definitions:

Pituitary Gland

A small, pea-sized gland located at the base of the brain, critical in controlling growth, metabolism, and reproductive functions.

Ventral Body Cavity

The front portion of the body cavity that houses internal organs, including the thoracic and abdominopelvic cavities.

Hormones

Chemical substances produced by glands, which travel through the bloodstream to affect various parts of the body.