Substantive tests of transactions affect the auditor's assessments of:
A) both control risk and planned detection risk.
B) both acceptable audit risk and control risk.
C) both inherent risk and control risk.
D) both inherent risk and planned detection risk.

Question

Quizplus · Accepted Answer

Substantive tests of transactions are designed to detect material misstatements in transaction classes (e.g., sales, purchases, cash receipts), and their results affect the auditor's assessment of both control risk and planned detection risk. The auditor uses the control risk assessment to determine the nature, extent, and timing of tests of controls and substantive tests of transactions. The planned detection risk affects the extent of substantive tests the auditor performs.

Substantive Tests of Transactions Affect the Auditor's Assessments Of