If Tests of Controls Induce the Auditor to Change the Assessed

question 41

Multiple Choice

If tests of controls induce the auditor to change the assessed level of control risk for Property Plant & Equipment from 50% to 100%, and audit risk (6%) and inherent risk remain constant, the acceptable level of detection risk:

• A)would most likely change from 10% to 5%.
• B)would most likely change from 20% to 40%.
• C)would most likely change from 30% to 15%.
• D)would be unchanged, because the auditor has control over detection risk.
• E)cannot be determined because inherent risk is not given.

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Definitions:

Structural Adaptations

Physical features of an organism that enable it to survive and reproduce in its environment.

β-Oxidation

A metabolic process that breaks down fatty acids in the mitochondria to generate acetyl-CoA, a key molecule in energy production.

Krebs Cycle

A series of enzymatic reactions in mitochondria that generate ATP through the oxidation of acetyl-CoA, central to cellular respiration.

Water-Soluble Vitamin

Vitamins that dissolve in water and are not stored in the body, thus requiring regular intake, such as vitamin C and B vitamins.