Question

The auditor's overall responses to address the assessed risks of material misstatement at the financial statement level may include all of the following except:

a. Adjusting the nature, timing, and extent of audit procedures.
b. Performing substantive analytical procedures.
c. Enhancing the supervision and review of the audit.
d. Reducing the extent of substantive procedures.

Answer 1

The auditor would not d. reduce the extent of substantive procedures in response to assessed risks of material misstatement; they would likely increase substantive procedures along with making adjustments to other audit strategies.

Step-by-step explanation:

The question is about how an auditor responds to the risk of material misstatement in financial statements.

The option that is not an auditor's response to such risks is d. Reducing the extent of substantive procedures.

Instead, auditors typically increase substantive procedures to gather more evidence when they assess a higher risk of material misstatement.

The other options listed, such as adjusting the nature, timing, and extent of audit procedures; performing substantive analytical procedures; and enhancing the supervision and review of the audit, are typical responses.