In an audit of a nonpublic company, the less control risk there is, the smaller the amount of planned substantive evidence that is required.

Question

Quizplus · Accepted Answer

This is true because when control risk is lower, there is a greater likelihood that the company's internal controls are effective and can be relied upon. Therefore, auditors can reduce the amount of planned substantive evidence they need to gather in order to provide assurance on the financial statements.

In an Audit of a Nonpublic Company, the Less Control