If no material differences are found using analytical procedures, and the auditor concludes that misstatements are not likely to have occurred, then:
A) the number or extent of tests of details of balances may be reduced.
B) it will be necessary to increase the tests of transactions.
C) it will be necessary to increase the tests of balances.
D) it will not be necessary to perform tests of balances.

Question

Quizplus · Accepted Answer

If material differences are not found using analytical procedures and the auditor concludes that misstatements are not likely to have occurred, then the auditor can rely on the analytical procedures and reduce the number or extent of tests of details of balances. This is because the results of the analytical procedures provide sufficient evidence to support the conclusion that the financial statements are not materially misstated.

If No Material Differences Are Found Using Analytical Procedures, and the Auditor