When an Auditor Increases the Assessed Level of Risk of Material

question 4

Multiple Choice

When an auditor increases the assessed level of risk of material misstatement because certain control procedures were determined to be ineffective, the auditor would most likely increase the:

• A)extent of tests of controls.
• B)level of detection risk.
• C)extent of substantive tests.
• D)level of inherent risk.

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Definitions:

Safety Hazard

A condition that has the potential to cause injury, illness, or harm to people, property, or the environment.

Fire Sprinklers

A component of a fire suppression system that discharges water when the effects of a fire have been detected, such as when a predetermined temperature has been exceeded.

Nursing Care Facility

A place of residence for individuals who require constant nursing care and have significant deficiencies with activities of daily living.

Assessing Clients

The process of evaluating the needs, conditions, and circumstances of clients, typically in a healthcare, social work, or coaching context to provide appropriate services or interventions.