Introduction:
It is about the degree of risk involved in the prudence shown the auditor while ascertaining the sufficiency and appropriateness of audit evidence, which might result into material statement if prudence is not displayed. It also wants us to explain that if there is a high risk factor decision and low risk decision is to be taken, how sufficiency and appropriateness goes in contrast and the materiality aspect is changed.
To explain:
It is about the importance of sufficiency and appropriateness factor of auditevidence, which may result into material misstatement related with that client. It is also about the contrast factor of difference in sufficiency and appropriateness, if it is the case of a high risk decision or a low risk decision.
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Auditing: A Risk Based-Approach (MindTap Course List)
- Which of the following statements is true regarding the sufficiency of evidence needed to test an account? a. Evidence sufficiency is a measure of evidence quality. b. Evidence sufficiency is affected by the quality of evidence. c. A relationship does not exist between evidence sufficiency and evidence quality. d. For a specific client, evidence sufficiency will be the same across all accounts.arrow_forwardWhich of the following regarding the level of materiality is correct? Select one: a. An increase in materiality will decrease the amount of substantive testing b. In order to decrease detection risk, the auditor would increase materiality. c. A higher risk of material misstatement will require an increase in materiality d. A decrease in materiality will result in a decrease in the cost of an auditarrow_forwardThe lower the materiality level, the higher the amount of required evidence from substantive procedures to compensate for increased risk. Further audit procedures include risk assessment procedures, test of controls and substantive tests. Group of answer choices False, True True, False True, True False, Falsearrow_forward
- state the effect on planned evidence (increase or decrease) of changing each of 'AN INCREASE IN TOLERABLE MISSTATEMENT, while the other factors remain unchanged.arrow_forwardWhich of the following characteristics is not considered essential to audit evidence? a. Availability of evidence b. Reliability of evidence c. Sufficiency of evidence d. Relevance of evidencearrow_forwardstate the effect on planned evidence (increase or decrease) of changing each of 'AN INCREASE IN ACCEPTABLE AUDIT RISK' factor, while the other factors remain unchanged.arrow_forward
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