If Tests of Controls Induce the Auditor to Change the Assessed

question 41

Multiple Choice

If tests of controls induce the auditor to change the assessed level of control risk for Property Plant & Equipment from 50% to 100%, and audit risk (6%) and inherent risk remain constant, the acceptable level of detection risk:

• A)would most likely change from 10% to 5%.
• B)would most likely change from 20% to 40%.
• C)would most likely change from 30% to 15%.
• D)would be unchanged, because the auditor has control over detection risk.
• E)cannot be determined because inherent risk is not given.