The Auditor Uses the Assessed Level of Risk of Material

question 31

Multiple Choice

The auditor uses the assessed level of risk of material misstatement to determine the acceptable level of detection risk for financial statement assertions. As the acceptable level of detection risk decreases, the auditor may do one or more of the following except change the:

• A)nature of substantive tests to more effective procedures.
• B)timing of substantive tests, such as performing them at year-end rather than at an interim date.
• C)extent of substantive tests, such as using larger sample sizes.
• D)assurances provided by substantive tests to a lower level.

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Definitions:

Fish

Aquatic, vertebrate animals with gills and fins, living in water bodies around the world, used for food, sports, or as pets.

Production Possibility Frontier

A figure displaying every possible maximum production scenario for two different goods, with fixed inputs such as resources and other variables.

Maximum Quantity

The largest amount of a good or service that can be produced or supplied under given circumstances.

Leisure Time

The period of time during which an individual is not working and can choose to engage in activities they enjoy.