The Auditor Uses the Assessed Level of Risk of Material

question 8

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:

Position of Authority

A role or status where an individual holds power or influence over others, often in a hierarchical structure.

Empowered Consent

The process of giving permission or agreement for something, rooted in a position of informed strength and autonomy.

Confidentiality

The ethical principle that mandates not sharing disclosed information with unauthorized individuals.

Risks and Benefits

Risks and benefits involve weighing the potential negative and positive outcomes of an action, procedure, or treatment, essential in decision-making processes.