Question

Which of the following factors most likely affects an auditor’s judgment about the nature and extent...

Which of the following factors most likely affects an auditor’s judgment about the nature and extent of the auditor’s audit documentation?

The number of personnel assigned to the audit.

The likelihood of a review by a concurring (second) partner.

The content of the management representations letter.

The risks of material misstatement of an assertion.

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Answer #1

Correct answer--- Risk of material misstatement of an assertion

Explanation

The risk factor decides how much audit evidence would make the auditor satisfied.

The auditor makes sure that he has obtained sufficient audit evidence that can reduce the risk of misstatement of an assertion.

Audit documents include evidences and reports that are collected by the auditor to give his opinion on the financial statement.

If the risk of an assertion is high then more evidences and documentation will be required and if risk of assertion is low then documentation requirement will also be low.

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