The purpose of the auditor's consideration of the effectiveness of internal controls is to determine the nature,extent,and timing of substantive testing.

Question

Quizplus · Accepted Answer

The purpose of assessing the effectiveness of internal controls is to determine the nature, extent, and timing of substantive testing that the auditor will need to perform. This is because if the internal controls are effective, the auditor can rely on them to mitigate the risk of material misstatements in the financial statements, which reduces the need for substantive testing. However, if the internal controls are not effective, the auditor will need to perform more substantive testing to obtain sufficient evidence about the accuracy and completeness of the financial statements.

The Purpose of the Auditor's Consideration of the Effectiveness of Internal