An auditor most likely would limit substantive tests of sales transactions when control risk is assessed as low for the existence or occurrence assertions concerning sales transactions and the auditor has already gathered evidence supporting:
A)opening and closing inventory balances.
B)cash receipts and accounts receivable.
C)receiving activities.
D)cutoffs of sales and purchases.

Question

Quizplus · Accepted Answer

When control risk is assessed as low for the existence or occurrence assertions concerning sales transactions, and evidence supporting cash receipts and accounts receivable has already been gathered, an auditor is more likely to limit substantive tests of sales transactions. This is because evidence on cash receipts and accounts receivable directly supports the existence and completeness of recorded sales, indicating that the sales transactions have indeed occurred and are accurately recorded.

An Auditor Most Likely Would Limit Substantive Tests of Sales