To evaluate a misstatement found in the substantive test of transactions,the auditors will
A)increase substantive testing of transactions to mitigate the misstatement
B)increase tests of controls to mitigate the misstatement
C)consider whether the misstatement is representative of a misstatement to be found in the entire population
D)consider whether the misstatement is representative of fraud in the entire population

Question

Quizplus · Accepted Answer

If the auditors find a misstatement in the substantive test of transactions, they should consider whether the misstatement is representative of a misstatement to be found in the entire population. This will help the auditors determine whether the misstatement is material and needs to be addressed. Increasing substantive testing or tests of controls may not be necessary if the auditors can determine that the misstatement is not representative of the entire population. Consideration of fraud should also be taken into account, but it is not the primary concern in this situation.

To Evaluate a Misstatement Found in the Substantive Test of Transactions,the