Question

Which of the following is an audit procedure in response to assessed risks?

Select one:

a. Making changes to the nature, timing, or extent of audit procedures to obtain more persuasive evidence

b. Designing and implementing appropriate responses to financial statements

c. Changing the recalculating procedures applied in financial statements

d. Developing an understanding of the entity’s control environment

Answer 1

a. Making changes to the nature, timing, or extent of audit procedures to obtain more persuasive evidence

Explanation :

The main requirement of the ISA 330 is to give guidance on how auditors should obtain sufficient appropriate evidence regarding the assessed risks of material misstatement by designing and implementing appropriate responses to those risks. The auditor shall design and perform further audit procedures whose nature, timing, and extent are based upon and are responsive to the assessed risks of material misstatement at the assertion level. The overall response to the assessed risk are:

• Emphasizing to the audit team the need to maintain professional skepticism.
• Assigning more experienced staff, those with special skills, or using experts.
• Providing more supervision.
• Incorporating additional elements of unpredictability in the selection of further audit procedures to be performed.
• Making general changes to the nature, timing or extent of audit procedures.