With a substantive audit strategy,what is an auditor likely to do?
A)Extensively tests internal controls.
B)Limit the testing of internal controls.
C)Not assess control risks.
D)Issue an adverse opinion on the financial statements.

Question

Quizplus · Accepted Answer

With a substantive audit strategy, the auditor is likely to limit the testing of internal controls and focus more on testing the accuracy and completeness of the financial data. This approach assumes that the internal controls are not effective, and therefore, the auditor needs to test the assertions directly. This is different from the controls-based audit approach, where the auditor tests the controls to gain assurance on the reliability of the financial data. The choice of limiting the testing of internal controls is based on several factors, including the size and complexity of the organization, the nature of its operations, and the effectiveness of its internal controls. The auditor may still test some internal controls if it is deemed necessary to reduce the substantive audit risk to an acceptable level.

With a Substantive Audit Strategy,what Is an Auditor Likely to Do