Where the assessed risk of material misstatement is high, the auditor should:

Question

Accepted Answer

Reduce detection risk by performing more extensive substantive procedures. Detection risk is inversely related to the risk of material misstatement. High assessed risk requires the auditor to lower detection risk through more persuasive evidence, larger samples and procedures nearer the year end.

Answer

A) Increase detection risk

Answer

B) Reduce detection risk by performing more extensive substantive procedures

Answer

C) Rely more heavily on management representations

Answer

D) Reduce the sample size

Where the assessed risk of material misstatement is high, the auditor should:

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