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The risk based approach to auditing is dependent upon the auditor's ability to understand the business sufficient to identify and adjust to the residual risk

The risk based approach to auditing is dependent upon the auditor's ability to understand the business sufficient to identify and adjust to the residual risk left in account balances. What is the effect upon the nature, extent and timing of audit evidence if the auditor assessment of internal controls of the client indicates that a higher degree of residual risk remains in account balances?

Gather less persuasive evidence.

Smaller sample sizes.

Gather more data at or after year end.

All of these effects on the nature, extent and timing of audit evidence are applicable.

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