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

---

Definitions:

Middle Value

Also known as the median, it is the value separating the higher half from the lower half of a data sample, array, or distribution.

Mode

The value that appears most frequently in a data set, representing the most common or popular response in a collection of data.

Frequently Occurring

Happening or appearing in a pattern that repeats often within a given time frame.

Adjusting Entries

Journal records created at the close of an accounting cycle to distribute revenues and costs to the period they truly happened in.