When an Auditor Increases the Planned Assessed Level of Control

question 103

Multiple Choice

When an auditor increases the planned assessed level of control risk because certain control activities were determined to be ineffective,the auditor would most likely increase the

• A) Extent of tests of details.
• B) Level of inherent risk.
• C) Extent of tests of controls.
• D) Level of detection risk.

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Definitions:

Petroleum Refining

The industrial process of transforming crude oil into useful products such as fuel, lubricants, and petrochemicals.

Paper Mills

Industrial facilities where raw materials like wood pulp are processed into paper and cardboard products.

Overapplied Manufacturing Overhead

A scenario in which the overhead costs assigned to manufacturing exceed the actual overhead expenses incurred.

Cost of Goods Sold

An expense measured and recorded on the income statement, representing the total cost of goods that were sold during a specified period.