If inherent risk is high and no assurance has been obtained from controls testing,
A) only overall analytical review procedures need to be performed to reduce detection risk to an acceptable level.
B) no further substantive testing needs to be performed.
C) extensive substantive procedures need to be performed to estimate the dollar value of any error in the account balance.
D) none of the above

Question

Quizplus · Accepted Answer

If inherent risk is high and no assurance has been obtained from controls testing, substantial substantive procedures need to be performed to estimate the dollar value of any error in the account balance. This is necessary to reduce detection risk to an acceptable level. Overall analytical review procedures are not sufficient in such a situation. No substantive testing is also not an option as that would increase the risk of material misstatement in the financial statements.

If Inherent Risk Is High and No Assurance Has Been