Which of the following is correct when controls are effective and assessed control risk is low?
A) There will be heavy emphasis on tests of controls.
B) Some substantive tests of transactions will still be performed.
C) Only substantive tests of transactions will be used.
D) both A and B

Question

Quizplus · Accepted Answer

When controls are effective and assessed control risk is low, auditors may place more emphasis on tests of controls to ensure that the controls are operating effectively. However, they will still perform some substantive tests of transactions to directly test for material misstatements in the financial statements.

Which of the Following Is Correct When Controls Are Effective