Accounting · Audit Risk and Planning
An audit junior is concerned about various circumstances of a new audit assignment that are likely to increase audit risk. Which of the following strategies is a valid procedure to address increased audit risk in an initial audit engagement?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Demanding an automatic fee increase mid-audit and immediately withdrawing if the client objects, without evaluating ethical protocols
- 2Allowing the client to decide the specific dates and availability of system access for testing computerized inventory systems
- 3Adopting a combined approach relying entirely on tests of controls due to tight reporting deadlines, without performing substantive procedures
- 4Budgeting extra time to document the understanding of the entity, its environment, and system of internal controls, and to verify opening balances✓
Correct answer
Budgeting extra time to document the understanding of the entity, its environment, and system of internal controls, and to verify opening balances
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