After obtaining an understanding of internal controls and assessing control risk of an entity, an auditor decided not to perform tests of controls for purposes of the audit. The auditor most likely decided that:
A)the available evidential matter obtained through tests of controls would not support an increased level of control risk.
B)a reduction in the assessed level of control risk is justified for certain financial statement assertions.
C)it would be inefficient to perform tests of controls that would result in a reduction in planned substantive procedures.
D)the assessed level of inherent risk exceeded the assessed level of control risk.

Question

Quizplus · Accepted Answer

The auditor likely decided not to perform tests of controls because it would be inefficient to do so and would not result in a reduction in planned substantive procedures. This means that the auditor believes that substantive procedures will provide sufficient evidence to support their audit opinion, and that testing controls would be unnecessary for this purpose. As a result, they have chosen to allocate their resources more effectively by focusing on substantive procedures instead.

After Obtaining an Understanding of Internal Controls and Assessing Control