Acceptable Audit Risk and the Amount of Substantive Evidence Required

question 79

True/False

Acceptable audit risk and the amount of substantive evidence required are inversely related; i.e., as acceptable audit risk increases, the amount of substantive evidence the auditor plans to accumulate should decrease.

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Definitions:

Proactive

Taking initiative by acting in advance of future situations rather than just reacting, to bring about positive change.

Ethics Intensity

The degree of importance given to the ethical dimension of decisions and actions.

Boards of Directors

A group of individuals elected to represent shareholders and make major decisions concerning the strategic direction of a company.

Shareholders

Individuals or entities that own shares in a corporation, giving them a claim on part of the company's assets and earnings.