When would auditors increase the amount of detailed audit procedures used to test the year-end account...
When would auditors increase the amount of detailed audit procedures used to test the year-end account balances and transactions from throughout the year?
a) When the inherent risk in high
b) When the inherent risk is low
c) When the control risk is low
d) When the detection risk is low
Homework Answers
Ans: Auditor will increase the amount of detailed audit procedures used to test the year-end account balances and transactions from throughout the year when the inherent risk is high. Inherent risk is the risk where auditor identifies that the chances of error are high in case of complex transactions are involved or transactions which include high degree of judgement. Inherent risk are those where auditor thinks that client's financial statement are susceptical to material misstatement. therefore auditor will increase the audit procedure to identify material misstatements.
so the correct answer is:
a) When the inherent risk in high
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