Assessing control risk at below the maximum most likely would involve
A) Changing the timing of substantive procedures by omitting interim testing and performing the tests at year-end.
B) Identifying specific internal controls relevant to specific assertions.
C) Performing more extensive substantive procedures with larger sample sizes than originally planned.
D) Reducing inherent risk for most of the assertions relevant to significant account balances.

Question

Quizplus · Accepted Answer

Assessing control risk at below the maximum involves identifying specific internal controls that are relevant to specific assertions, which can be relied upon to reduce the amount of substantive testing required. This allows the auditor to reduce overall audit risk, while still obtaining sufficient audit evidence. Changing the timing of substantive procedures (A) or performing more extensive substantive procedures (C) would not necessarily be appropriate if control risk is assessed at less than the maximum. Reducing inherent risk (D) is not directly related to control risk assessment.

Assessing Control Risk at Below the Maximum Most Likely Would