The auditor must extend the audit procedures in the audit of year-end cash when there are inadequate internal controls.

Question

Quizplus · Accepted Answer

When there are inadequate internal controls over cash, the risk of material misstatement is higher. Therefore, the auditor is required to extend the audit procedures to gather more evidence to support the completeness, existence, and valuation assertion of cash. This would include performing more substantive testing such as bank confirmations, tracing transactions to bank statements, and reviewing cash reconciliations.

The Auditor Must Extend the Audit Procedures in the Audit