If the Auditor's Assessment of Audit Risk Is Low (E

question 8

Multiple Choice

If the auditor's assessment of audit risk is low (e.g. ,1% rather than 5%) ,what is the effect on the amount of substantive testing performed by the auditor?

• A)Increase in substantive testing.
• B)Decrease in substantive testing
• C)No change in substantive testing.
• D)Substantive testing is not needed.

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Definitions:

Unilateral Mistake

Occurs when one party to a contract is mistaken about a basic assumption on which they made the contract, and the other party either knows or has reason to know of the mistake.

Standard-Size

Refers to products or items that are made to adhere to specific, established dimensions or norms commonly accepted in their category.

Rescinded Contract

A contract that has been declared void by one or both parties, returning them to the position they were in before the contract was made.

Concealment

The act of withholding material information that one is legally or morally bound to disclose, especially in contracts or insurance.