Auditors follow a four-step approach to reduce assessed control risk. Which of the following is not one of the four?
A) Apply transaction-related audit objectives to a class of transactions.
B) Identify accounts that have high inherent risk.
C) Identify key controls that reduce control risk.
D) For potential misstatements, design appropriate substantive tests of transactions.

Question

Quizplus · Accepted Answer

The four-step approach includes applying transaction-related audit objectives to a class of transactions, identifying key controls that reduce control risk, designing tests of controls to ensure the key controls are operating effectively, and designing appropriate substantive tests of transactions for potential misstatements. Identifying accounts with high inherent risk is not one of the steps.

Auditors Follow a Four-Step Approach to Reduce Assessed Control Risk