Final answer:
When the assessed risk of material misstatement is high, auditors need to gather more persuasive audit evidence to ensure that the financial statements are not materially misstated. The evidence must be of higher quality and reliability to adequately address the increased risk. Withdrawing from the engagement or avoiding the assertion is not a standard procedure unless specific, exceptional circumstances arise.
Step-by-step explanation:
If the assessed risk of material misstatement for an assertion is high, auditors need to gather more persuasive audit evidence. This involves obtaining audit evidence that is more reliable and stronger in terms of quality to reduce audit risk to an acceptably low level. When risks are higher, simply gathering more evidence is not enough; the evidence must be sufficiently convincing to address the risk that the financial statements are materially misstated. This increased level of assurance is necessary because a high risk of material misstatement implies a greater likelihood that the financial statements could be significantly inaccurate.
Auditors assess risks throughout the audit process to determine the nature, timing, and extent of their audit procedures. Avoiding an assertion or withdrawing from an engagement is not the standard response to high-risk areas unless the situation falls under exceptional circumstances where the auditor cannot obtain sufficient appropriate evidence or continue for ethical or legal reasons.