After considering a client's internal controls, an auditor has concluded that it is well designed and is functioning as intended. Under these circumstances the auditor would most likely:
A) determine whether transactions are recorded to permit preparation of financial statements in conformity with generally accepted accounting principles.
B) perform reduced tests of controls to the extent outlined in the audit program.
C) not increase the extent of predetermined substantive tests.
D) determine the control procedures that should prevent or detect errors and irregularities.

Question

Quizplus · Accepted Answer

If the internal controls are well designed and functioning as intended, the auditor would not need to increase the extent of substantive tests, as the reliance on controls reduces the need for extensive substantive testing.

After Considering a Client's Internal Controls, an Auditor Has Concluded