After performing a study and evaluation of the client's system of internal control, an auditor has concluded that the system is well designed and is functioning as anticipated. Under these circumstances the auditor would most likely:
A) not increase the extent of predetermined substantive tests.
B) increase the extent of anticipated analytical review procedures.
C) cease to perform further substantive tests.
D) perform all tests of controls to the extent outlined in the preplanned audit program.

Question

Quizplus · Accepted Answer

If the auditor has concluded that the system of internal controls is well designed and functioning as anticipated, there is no need to increase the extent of predetermined substantive tests. The auditor can rely on the system of internal controls and perform substantive tests to a lesser extent, as deemed appropriate based on the level of risk identified. This will save time and cost for both the auditor and the client.

After Performing a Study and Evaluation of the Client's System