As operating effectiveness of internal controls improve and are supported by additional tests of controls, substantive testing can be reduced.

Question

Quizplus · Accepted Answer

As the operating effectiveness of internal controls improves, it provides more assurance of the accuracy and completeness of financial information. This, in turn, allows auditors to rely more on the controls and perform less substantive testing. However, auditors still need to perform some level of substantive testing to obtain reasonable assurance.

As Operating Effectiveness of Internal Controls Improve and Are Supported