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34) As control risk increases, the amount of substantive evidence the auditor plans to accumulate should increase.35) Inherent risk and control risk are directly related.36) Audit assurance is the complement of planned detection risk, that is, one minus planned detection risk.9.6 Learning Objective 9-6 1) If an auditor believes the chance of financial failure is high and there is a corresponding increase in business risk for the auditor, acceptable audit risk would likely2) When management has an adequate level of integrity for the auditor to accept the engagement but cannotbe regarded as completely honest in all dealings, auditors normallyA) reduce acceptable audit risk and increase inherent risk.B) reduce inherent risk and control risk.C) increase inherent risk and control risk.D) increase acceptable audit risk and reduce inherent risk.3) When the auditor is attempting to determine the extent to which external users rely on a client's financial statements, they may consider several factors exceptfor4) ________ is the risk that the auditor or audit firm will suffer harm after the audit is finished, even though the audit report was correct.9
5) There are several factors that affect engagement risk and, therefore, acceptable audit risk. Discuss three of these factors.The auditor’s evaluation of management’s integrity. Business risk is greater and acceptable audit risk will be lower when the client’s management has questionable integrity.6) If an auditor believes the client will have financial difficulties after the audit report is issued, and external users will be relying heavily on the financial statements, the auditor will probably set acceptable audit risk as low.