If no control deficiencies are identified, how will the extent of substantive testing required differ from a setting where deficiencies in internal control were identified?
A) The extent of testing will be more.
B) The extent of testing will be less.
C) The extent of testing will be the same in the two settings.
D) The extent of testing is not affect by control deficiencies.

Question

Quizplus · Accepted Answer

If no control deficiencies are identified, then the internal controls can be considered reliable and effective, reducing the risk of material misstatements. This means that the extent of substantive testing required can be reduced, as the reliance on internal controls is high. On the other hand, if deficiencies in internal control were identified, then the risk of material misstatements is higher, leading to an increase in the extent of substantive testing required.

If No Control Deficiencies Are Identified, How Will the Extent