While Performing a Substantive Test of Details During an Audit

question 56

Multiple Choice

While performing a substantive test of details during an audit, the auditor determined that the sample results supported the conclusion that the recorded account balance was materially misstated. Which of the following is the least likely auditor reaction to this discovery?

• A) perform expanded audit tests in the relevant areas
• B) increase detection risk in the relevant areas
• C) increase the sample size
• D) take no action until tests of other audit areas are completed

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Definitions:

Required Return

The minimum expected yield by investors for providing capital to a company, considering the investment’s risk level; another perspective on the return investors seek for risk-taking.

Caster

The forward or rearward tilt of the kingpin centerline to vertical when viewed from the side. Zero caster indicates that the kingpin is located at true vertical. Positive caster occurs when the kingpin tilts rearward (leans behind) and negative caster occurs when the kingpin tilts forward.

Heavy-duty Trucks

Large and robust trucks designed to haul significant weight, often used for commercial, construction, or industrial purposes.

Positive Caster

The angle created by the steering pivot points in the front wheels of a vehicle, enhancing stability and steering effort.