How does the auditor's judgements about the risk of material misstatements affect the audit?
What will be an ideal response?
The knowledge, skill, and ability of personnel assigned to the engagement should be commensurate with the assessment of the level of risk of the engagement.
The auditor should exercise professional skepticism. This involves maintaining an attitude that includes a questioning mind and critical assessment of audit evidence.
Fraud risk factors that have control implications may limit the auditor's ability to assess control risk below the maximum and thus reduce substantive testing.
PTS: 1
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