The ultimate purpose of assessing control risk is to contribute to the auditor's evaluation of the
A) Factors that raise doubts about the auditability of the financial statements.
B) Operating effectiveness of internal control policies and procedures.
C) Risk that material misstatements exist in the financial statements.
D) Possibility that the nature and extent of substantive tests may be reduced.

Question

Quizplus · Accepted Answer

The ultimate purpose of assessing control risk is to evaluate the risk that material misstatements exist in the financial statements. This evaluation helps the auditor to plan and perform further audit procedures to reduce the risk of misstatement to an acceptably low level. Therefore, choice C is the correct answer.

The Ultimate Purpose of Assessing Control Risk Is to Contribute