Question 13

When control risk is deemed high, the auditor should: (Select the correct answer.)

a. Perform sufficient and appropriate substantive procedures that reduce detection risk to a low level.

b. Perform sufficient and appropriate substantive procedures that reduce inherent risk to a low level.

c. Perform fewer sufficient and appropriate substantive procedures in order to increase detection risk.

d. Resign from the audit engagement.

Question 14

An auditor determines that management integrity is high, the RMM is low, and the clients internal controls are effective. Which of the following conclusions can be reached regarding the need to obtain direct evidence regarding the account balances? (Select the correct answer.)

a. Direct evidence of account balances is not needed.

b. Direct evidence of account balances can be limited to material account balances, and the extent of testing should be sufficient to corroborate the auditors assessment of low risk.

c. Direct evidence gathering can be limited to analytical procedures.

d. Direct evidence should be gathered for all account balances, regardless of the auditors assessment of control risk.