Auditors can mitigate risk,like the failure to detect material dollar errors in the financial statements,by doing what?
A)Performing substantive procedures.
B)Performing tests of controls.
C)Assessing control risk.
D)Obtaining a client representation letter.

Question

Quizplus · Accepted Answer

Performing substantive procedures involves testing account balances, transactions, and disclosures in the financial statements to detect material misstatements. By doing so, auditors can mitigate the risk of failing to detect material dollar errors in the financial statements. Tests of controls and assessing control risk are focused on the effectiveness of internal controls, which may not always prevent material errors from occurring. Obtaining a client representation letter is a form of documentation but does not directly mitigate the risk of failing to detect material dollar errors.

Auditors Can Mitigate Risk,like the Failure to Detect Material Dollar