As the Acceptable Level of Detection Risk Decreases, the Assurance

question 28

Multiple Choice

As the acceptable level of detection risk decreases, the assurance directly provided from:

• A)substantive tests should increase.
• B)substantive tests should decrease.
• C)tests of controls should increase.
• D)tests of controls should decrease.

---

Definitions:

Inelastic

A term describing a situation where the demand or supply for a good or service is relatively unresponsive to changes in price.

Elastic

Describes a situation in which the demand or supply of a product is sensitive to changes in price, meaning a small change in price leads to a large change in the quantity demanded or supplied.

Supply Curve

A graphical representation of the relationship between the price of a good and the quantity of the good supplied.

Demand Curve

A graphical representation showing the inverse relationship between the price of a good or service and the quantity demanded by consumers.