Assessing control risk at a lower level most likely would involve
A) Changing the timing of substantive procedures by omitting interim testing and performing the tests at year-end.
B) Identifying specific internal controls relevant to specific assertions.
C) Performing more extensive substantive procedures with larger sample sizes than originally planned.
D) Reducing inherent risk for most of the assertions relevant to significant account balances.

Question

Quizplus · Accepted Answer

Assessing control risk at a lower level involves identifying specific internal controls relevant to specific assertions. This is done to gain assurance that the internal controls existing in an organization are operating effectively and efficiently to facilitate the company's compliance with the applicable accounting standards and financial reporting requirements. This would enable auditors to perform substantive procedures on a broader range of transactions rather than a smaller subset of tests, thus lowering control risk. Changing the timing of substantive procedures, reducing inherent risk, or performing more extensive substantive procedures may not necessarily be linked to assessing control risk at a lower level.

Assessing Control Risk at a Lower Level Most Likely Would