A medium-sized, nonpublic company has few effective controls and significant inherent risks. The auditor in this situation should emphasize tests of details and balances and substantive tests of transactions; no substantive analytical procedures should be performed in this situation by the auditor.

Question

Quizplus · Accepted Answer

While the auditor should emphasize tests of details and balances and substantive tests of transactions in situations with few effective controls and significant inherent risks, the auditor should still perform substantive analytical procedures as they can provide valuable evidence and help identify potential misstatements in the financial statements.

A Medium-Sized, Nonpublic Company Has Few Effective Controls and Significant