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warrenrulez warrenrulez
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A year ago
Which of the following is an accurate statement regarding how the acceptable risk of overreliance (ARO) and the acceptable risk of incorrect acceptance (ARIA) interact to affect evidence accumulation?

▸ If internal controls are likely to be effective, preliminary control risk can be increased.

▸ A lower control risk requires a lower ARO in testing the controls, which requires a smaller sample size.

▸ If controls are found to be effective, control risk can remain low, which permits the auditor to increase ARIA, thereby requiring a smaller sample size in the substantive tests of details of balances.

▸ If misstatements are considered unlikely, ARIA will decrease, and the sample size will also decrease.
Textbook 
Auditing and Assurance Services

Auditing and Assurance Services


Edition: 17th
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naderaidenaderaide
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A year ago
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warrenrulez Author
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A year ago
Just got PERFECT on my quiz
jaray75
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Yesterday
Smart ... Thanks!
einstein
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2 hours ago
this is exactly what I needed
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