When control risk is assessed as high the auditor needs to:
A)perform more tests of controls.
B)perform more direct testing of account balances.
C)perform significantly fewer tests of controls.
D)perform significantly less testing of account balances.

Question

Quizplus · Accepted Answer

When control risk is assessed as high, the auditor should perform more direct testing of account balances, as relying on controls alone may not be sufficient to mitigate the risk of material misstatements in the financial statements. Therefore, the auditor should perform more substantive testing of account balances to obtain reasonable assurance about the accuracy and completeness of the financial statements. Performing more tests of controls (choice A) would not be sufficient to reduce the risk to an acceptable level, and performing significantly fewer tests of controls (choice C) or significantly less testing of account balances (choice D) would not be appropriate either.

When Control Risk Is Assessed as High the Auditor Needs