The ultimate purpose of assessing control risk is to contribute to the auditor's evaluation of the:
A)factors that raise doubts about the auditability of the financial report.
B)operating effectiveness of internal control policies and procedures.
C)risk that material misstatements exist in the financial report.
D)possibility that the nature and extent of substantive tests may be reduced.

Question

Quizplus · Accepted Answer

The ultimate purpose of assessing control risk is to evaluate the risk that material misstatements exist in the financial report. This evaluation helps the auditor to determine the nature, timing, and extent of substantive tests to be performed. The assessment of control risk also considers the effectiveness of internal control policies and procedures in preventing or detecting material misstatements. Factors that raise doubts about the auditability of the financial report may also be considered, but the primary focus is on evaluating the risk of material misstatements.

The Ultimate Purpose of Assessing Control Risk Is to Contribute