An auditor most likely would limit substantive audit tests of sales transactions when control risk is assessed as low for the occurrence assertion concerning sales transactions and the auditor has already gathered evidence supporting:
A)opening and closing inventory balances.
B)cash receipts and accounts receivable.
C)shipping and receiving activities.
D)cut-offs for sales and purchases.

Question

Quizplus · Accepted Answer

When control risk is assessed as low for the occurrence assertion concerning sales transactions, and evidence supporting cash receipts and accounts receivable has already been gathered, an auditor is more likely to limit substantive audit tests of sales transactions. This is because evidence on cash receipts and accounts receivable directly relates to the sales transactions' completeness and accuracy, providing assurance about the occurrence of recorded sales.

An Auditor Most Likely Would Limit Substantive Audit Tests of Sales