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In M/J 16 ques about Audit risk on Vancouver group, it states in exhibit 1 that ‘ there has been some recent recruits in audit team whose first assignment will be the Vancouver Group’
My question is that wouldnt it increase detection risk because some auditors in audit team arent experienced and may not have knowledge about the company and so may not detect Material misstatement in FS?
Tia.
Potentially yes but at the planning stage you would be speculating that the procedures that have still to be performed “will not detect misstatement that exists and could be material”.
There is no suggestion that planning is inadequate – “you” are an audit manager (and presumably competent for this task) and there is going to be “an audit team briefing”.
I think the examiner is being suitably vague with “a number” just to provide context for the briefing note that you are being asked to draft.
If you made some reference to detection risk but that it would be managed by proper assignment of work to the new recruits and direction, supervision and review that there might be up to 2 marks awarded for this consideration.
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