Final answer:
An auditor adjusts the audit plan in response to the risk of material misstatement by increasing substantive procedures and tests of controls. Decreasing substantive procedures is typically not a response to increased risk and thus, is the exception to how audit plans change to maintain audit risk.
"The correct option is approximately option 2"
Step-by-step explanation:
The question pertains to audit planning and how an auditor adjusts their audit plan in response to the assessed risk of material misstatement to maintain a consistent audit risk level. The risk of material misstatement (RMM) is the risk that there are material errors in the financial statements that the auditor will not detect. This is a key consideration in planning an audit.
When an auditor assesses a high risk of material misstatement:
Conversely, when an auditor assesses a lower risk of material misstatement:
To answer the question, the only option that is not a way the auditor's audit plan changes to maintain the same level of audit risk given a change in the risk of material misstatement is "2) By decreasing the extent of substantive procedures". A decrease in the extent of substantive procedures would generally be inconsistent with an increased risk of material misstatement.