If tests of controls induce the audit team to change the assessed level of control risk for fixed assets from 0.4 to 1.0 and audit risk (0.05) and inherent risk remain constant, the acceptable level of detection risk is most likely toa. Change from 0.1 to 0.04.b. Change from 0.2 to 0.3.c. Change from 0.25 to 0.1.d. Be unchanged.

If tests of controls induce the audit team to change the assessed level of control risk for fixed assets from 0.4 to 1.0 and audit risk (0.05) and inherent risk remain constant, the acceptable level of detection risk is most likely toa. Change from 0.1 to 0.04.b. Change from 0.2 to 0.3.c. Change from 0.25 to 0.1.d. Be unchanged.

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter7: Planning The Audit: Identifying, And Responding To The Risk Of Material Misstatement

Section: Chapter Questions

Problem 17MCQ

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The audit risk model consists of: AR = IR x CR x DR. The detection risk is the dependent variable. What is the acceptable level of detection risk if the assessed level of inherent risk is HIGH and the control risk is MEDIUM? Group of answer choices a.Lower b.Medium c.Lowest d.Higher
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The maximum amount of error in a population that the auditor is willing to accept is referred to as the acceptable risk expected error tolerable error tolerable materiality