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:

Paracrine Chemical Messengers

Substances released by cells that affect other nearby cells, allowing for local cell communication.

Placental LH-like Hormone

A hormone produced by the placenta that is structurally similar to luteinizing hormone (LH) and supports the corpus luteum, maintaining the production of progesterone during early pregnancy.

Trimester

A term describing a period of three months, often used to divide the nine months of pregnancy into three stages, each with its own developmental milestones.

Melatonin Secretion

The release of melatonin, a hormone regulated by the pineal gland, which influences sleep-wake cycles and circadian rhythms.