When control risk is high the audit strategy is to:
A)assume the client's management is dishonest and immediately report them to ASIC
B)increase reliance on tests of controls and reduce reliance on substantive testing of transactions and account balances.
C)do little or no tests of controls and increase reliance on substantive testing of transactions and account balances
D)refuse to continue with the remainder of the audit due to the high risk of fraud

Question

Quizplus · Accepted Answer

When control risk is high, auditors cannot rely on the client's internal controls to prevent or detect material misstatements. Therefore, they increase reliance on substantive testing of transactions and account balances to gather sufficient appropriate audit evidence.

When Control Risk Is High the Audit Strategy Is To