If auditors conduct substantive procedures as of 10/31 for an entity with a 12/31 year-end
A) Additional tests are seldom conducted for the remaining period.
B) Additional control tests are required in the remaining period.
C) The client's controls likely are ineffective.
D) Additional tests likely will be performed in the remaining period.

Question

Quizplus · Accepted Answer

If auditors conduct substantive procedures as of 10/31 for an entity with a 12/31 year-end, they are unlikely to perform additional tests for the remaining period, given that substantive procedures provide sufficient audit evidence. However, if auditors identify significant risks or changes in the entity's operations during the remaining period, they may need to perform additional tests to ensure the accuracy of the financial statements. Therefore, option D is the best choice. Option A is incorrect as additional tests may be required based on the circumstances. Option B is incorrect as it refers to control tests, which are typically performed earlier in the audit process. Option C is incorrect as it assumes that the client's controls are always ineffective if substantive procedures are necessary.

If Auditors Conduct Substantive Procedures as of 10/31 for an Entity