Which is most likely when the assessed level of control risk increases?
A)Change from performing substantive procedures at year-end to an interim date.
B)Perform substantive procedures directed inside the entity rather than tests directed toward parties outside the entity.
C)Use the maximum number of dual purpose tests.
D)Use larger sample sizes for substantive procedures.

Question

Quizplus · Accepted Answer

When the assessed level of control risk increases, auditors are likely to use larger sample sizes for substantive procedures to gain more assurance that the financial statements are free of material misstatement. This is because a higher control risk implies that the entity's internal controls are less effective, necessitating more extensive substantive testing.

Which Is Most Likely When the Assessed Level of Control