While Performing a Substantive Test of Details During an Audit

question 55

Multiple Choice

While performing a substantive test of details during an audit, the auditor determined that the sample results supported the conclusion that the recorded account balance was materially misstated.Which of the following is the least likely auditor reaction to this discovery?

• A)Perform expanded audit tests in the relevant areas.
• B)Increase detection risk in the relevant areas.
• C)Increase the sample size.
• D)Take no action until tests of other audit areas are completed.

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Definitions:

Annually

Annually means once every year.

Investors

Individuals or institutions that allocate capital with the expectation of receiving financial returns, often involving the purchase of securities.

Compound Annual Rate

The rate at which an investment would have grown annually if it had compounded at a steady rate.

Dividends

Payments made by a corporation to its shareholder members, typically from profits.