When tests of controls are not performed while obtaining an understanding under the primarily substantive approach:
A) they must be performed at year-end.
B) preliminary control risk must be assessed at the maximum.
C) preliminary control risk must be assessed at below maximum.
D) preliminary control risk must be assessed at the minimum.

Question

Quizplus · Accepted Answer

When tests of controls are not performed while obtaining an understanding under the primarily substantive approach, it implies that the auditor cannot rely on the controls to prevent or detect material misstatements. Therefore, the preliminary control risk must be assessed at the maximum, indicating the auditor plans to rely more on substantive procedures.

When Tests of Controls Are Not Performed While Obtaining an Understanding