If the Risk of Material Misstatement Is Low and Detection

question 39

Multiple Choice

If the risk of material misstatement is low and detection risk is high _______.

• A)then a smaller sample size should be selected
• B)then a larger sample size should be selected
• C)then control risk should be assessed as high
• D)the auditor should consider outsourcing the audit work to the internal audit function

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Definitions:

Classroom Computer

A computer used within an educational setting to enhance learning, facilitate teaching, and provide access to digital resources.

Consistency

The quality of being predictable, reliable, and steady over time.

Discounting Principle

A concept in psychology which suggests that when there are multiple causes for a behavior, the importance or contribution of any single cause is reduced.

Potential Cause

An element or factor that might bring about a certain effect or outcome, not yet proven as the definitive cause.