If the auditor decides to assess control risk at the maximum level, tests of controls are:
A) reduced in number.
B) not performed.
C) unchanged from prior planned settings.
D) increased in number.

Question

Quizplus · Accepted Answer

When the auditor assesses control risk at the maximum level, it indicates that the auditor believes the controls are ineffective and cannot rely on them. Therefore, tests of controls are not performed as they do not provide any meaningful information to the auditor. The auditor will instead focus on substantive procedures to gain assurance about the accuracy and completeness of the financial statements.

If the Auditor Decides to Assess Control Risk at the Maximum