The auditors assessed risk of material misstatement at 0.50 and said they wanted to achieve a0.05 risk of failing to express a correct opinion on financial statements that were materiallymisstated. What detection risk do the auditors plan to use for planning the remainder of theaudit work?a. 0.20.b. 0.10.c. 0.75.d. 0.00

Q: The risk of material misstatement is composed of which audit risk components?a. Inherent risk and…

A: Audit risk: It is the probability that in the materially misrepresented financial statements, the…

Q: When performing audit procedures, the auditor is faced with an uncertainty of not detecting material…

A: Define sampling risk. Sampling risk is the risk that a sample statistic will differ from the true…

Q: Which of the following is appropriate about risk assessment? A. The assessed level of inherent and…

A: Risks are the unfavourable situations or circumstances that can make loss for the organisation or…

Q: STATEMENT 1: In an audit sampling application, detection risk arises from the uncertainties of…

A: Audit sampling is a process or procedure in which a sample of items are selected from the total…

Q: From the following statements, identify which error/s creates material misstatement while reporting…

A: Material misstatement is referred to as an information in financial statements, which are actually…

Q: If tests of controls induce the audit team to change the assessed level of control risk for fixed…

A:

Q: Inherent risk is: a. the risk of a misstatement occurring irrespective of any internal controls put…

A: A financial audit seems to be an impartial evaluation and analysis of a firm's financial statements…

Q: Please access PCAOB Auditing Standard No. 12 "Identifying and Assessing Risks of Material…

A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve first three…

Q: The risk that the financial statements are materially misstated prior to audit refers to the risk of…

A: A material misstatement is a misstatement in the financial statements that could reasonably be…

Q: On the basis of audit evidence gathered and evaluated, an auditor decides to decrease the level of…

A: Answer: Option D. Decrease in the assessed control risk.