After the auditor has identified the key internal controls and weaknesses and assessed control risk,it is appropriate to decide whether
A)substantive tests will be increased sufficiently to justify the cost of performing tests of controls.
B)substantive tests will be reduced sufficiently to justify the cost of performing tests of controls.
C)tests of controls will be increased sufficiently to justify the cost of performing substantive tests.
D)tests of controls will be reduced sufficiently to justify the cost of performing substantive tests.

Question

Quizplus · Accepted Answer

After identifying key internal controls and weaknesses and assessing control risk, the auditor decides whether the reduction in substantive tests, due to reliance on those controls, justifies the cost of performing tests of controls. If controls are strong, the auditor may perform tests of controls to justify reducing substantive testing, which can save time and resources.

After the Auditor Has Identified the Key Internal Controls and Weaknesses