Final answer:
Auditors do not reevaluate inherent risk at the end of the audit; this risk is assessed during the planning stage and reflects the nature of the business, not audit findings. Other aspects such as misstatements, materiality decisions, and fraud risk are indeed reevaluated based on the evidence gathered. The correct option is C.
Step-by-step explanation:
At the end of the audit, the item that is NOT reevaluated by the auditors is C. Inherent risk based on audit findings. Auditors assess inherent risk at the planning stage of the audit, and it represents the susceptibility of an assertion to a misstatement before considering any related controls.
Inherent risk is related to the nature of the business or the environment in which it operates and is not typically affected by the audit findings. On the other hand, auditors would reevaluate misstatements found during the audit, materiality decisions made during the audit, and fraud risk based on audit findings, as these are directly impacted by the evidence gathered during the audit process.
For example, if an auditor finds several misstatements in the financial reports, they will assess the implications of these misstatements on the audit opinion. Similarly, materiality decisions may be revisited in light of misstatements discovered or changes in financial conditions. Finally, the evaluation of fraud risk may be influenced by audit findings that suggest the possibility of fraudulent activities.