Which of the following assessments are affected by substantive tests of transactions?
A) both acceptable audit risk and control risk
B) both control risk and planned detection risk
C) both inherent risk and control risk
D) both inherent risk and planned detection risk

Question

Quizplus · Accepted Answer

Substantive tests of transactions affect both control risk and planned detection risk. Control risk is reduced as tests are conducted to determine whether key control procedures are operating effectively. Planned detection risk is lowered as tests are performed to confirm that monetary errors in the financial statements are being detected. Acceptable audit risk is determined at the planning stage and is not affected by substantive tests. Inherent risk is the risk that monetary misstatements exist in the financial statements prior to testing, and is not directly affected by the tests themselves.

Which of the Following Assessments Are Affected by Substantive Tests