Question: Explain why inherent risk is set for audit objects for segments (classes of transaction, balances, and presentation and disclosure) rather than for the overall audit.

Explain why inherent risk is set for audit objects for segments (classes of transaction, balances, and presentation and disclosure) rather than for the overall audit. What is the effect on the amount of evidence the auditor must accumulate when inherent risk is increased from medium to high for an audit objective?

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