Question

As lower acceptable levels of both audit risk and materiality are established, the auditor should plan more work on individual accounts to

A. Decrease the risk of overreliance.
B. Find larger errors.
C. Increase the tolerable misstatements in the accounts.
D. Find smaller errors.

Answer 1

Lowering acceptable levels of audit risk and materiality means the auditor plans more work on individual accounts to find smaller errors.

Step-by-step explanation:

When lower acceptable levels of both audit risk and materiality are established, the auditor should plan more work on individual accounts to D. Find smaller errors. Lowering the acceptable levels of audit risk and materiality means that the auditor is more concerned with even smaller errors or misstatements in the accounts. By planning more work on individual accounts, the auditor can identify and rectify these smaller errors, ensuring the reliability and accuracy of the financial statements.