Regardless of the assessed level of control risk,an auditor of a nonpublic company would perform some
A) Tests of controls to determine the effectiveness of internal control policies.
B) Analytical procedures to verify the design of internal control activities.
C) Substantive tests to restrict detection risk for significant transaction classes.
D) Dual-purpose tests to evaluate both the risk of monetary misstatement and preliminary control risk.

Question

Quizplus · Accepted Answer

Regardless of the assessed level of control risk, an auditor of a nonpublic company would perform substantive tests to restrict detection risk for significant transaction classes. This is because the auditor's objective is to obtain reasonable assurance that the financial statements are free from material misstatement, and substantive tests are necessary to achieve this objective. Tests of controls and dual-purpose tests may also be performed, but they are not the primary focus of the auditor's work. Analytical procedures may be used to identify areas of potential misstatement that require further investigation but are not a substitute for substantive testing.

Regardless of the Assessed Level of Control Risk,an Auditor of a Nonpublic