Question

A factor that is likely to increase an auditors’ acceptable audit risk is: a Poorer internal...

A factor that is likely to increase an auditors’ acceptable audit risk is:

a Poorer internal controls at the client

b Less inherent risk for key client accounts

c Very low likelihood of client bankruptcy

d The availability of reliable substantive analytical procedures

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Answer #1

Audit risk is the risk of expressing inappropriate audit opinion on financial statements by the auditor.

An auditor will have to face high degree of audit risk if the internal control at the client place are poor. In case of poor internal control auditor will have to digg deeper for the reliable evidences that the financial statements are free from material misstatements. Hence, among all the given options, we can say that poorer internal controls at the client is likely to increase an auditors’ acceptable audit risk.

A IS CORRECT OPTION

THANK YOU, PLEASE UPVOTE

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