Question: Explain why inherent risk is set for segments rather than for the overall audit. What is the effect on the amount of evidence the auditor

Explain why inherent risk is set for segments 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 a segment?

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Inherent risk is set for segments rather than for the overall audit because misstatements occur in segments By identifying expectations of misstatements in segments the auditor is thereby able to modify audit evidence by searching for misstatements in those segments When inherent risk is increased from medium to high the auditor should increase the audit evidence accumulated to determine whether the expected misstatement ... View full answer

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