Question

Assume for Client X that inherent risk is assessed at 30%, control risk is assessed at 100%, audit risk is 5%, and detection risk is therefore determined to be 17%. Assume for Client Z that inherent risk is assessed at 100%, control risk is assessed at 100%, audit risk is 1%, and detection risk is therefore determined to be 1%. What is true about the amount of audit work that will need to be conducted?a. Client X will require more audit work than Client Z.b. Client Z will require more audit work than Client X.c. Both clients will require a similar amount of audit work.d. The auditor will most likely resign from the Client Z audit because the inherent risk and control risk are so high.

Answer 1

Answer:

B. Client Z will require more audit work than Client X.