Assessing control risk at less than high would most likely involve:
A)changing the timing of substantive tests by omitting interim testing and performing the tests at year-end.
B)identifying specific internal controls relevant to specific assertions.
C)performing more extensive substantive tests with larger sample sizes than originally planned.
D)reducing inherent risk for most of the assertions relevant to significant account balances.

Question

Quizplus · Accepted Answer

Assessing control risk at less than high would involve identifying specific internal controls relevant to specific assertions, such as performing tests of controls to determine the effectiveness of those controls in preventing or detecting material misstatements. This would allow the auditor to rely on those controls and reduce substantive testing, resulting in a more efficient audit. Changing the timing of substantive tests (A) by omitting interim testing and performing the tests at year-end would not necessarily reduce control risk. Performing more extensive substantive tests (C) would not affect control risk, but rather inherent risk. Reducing inherent risk (D) would not necessarily result in reduced control risk.

Assessing Control Risk at Less Than High Would Most Likely