If the auditor's assessment is that there is high risk due to the subjectivity of the accounting process,substantive procedures should be more rigorous.

Question

Quizplus · Accepted Answer

If the auditor identifies high risk due to subjectivity in the accounting process, it means that there is a greater likelihood of material misstatements in the financial statements. In such cases, the auditor would need to perform more rigorous and extensive substantive procedures such as obtaining additional audit evidence, performing more detailed testing, and increasing the level of audit sampling. This would help the auditor to obtain sufficient and appropriate evidence to reduce the risk of material misstatements to an acceptable level. Therefore, the statement is true.

If the Auditor's Assessment Is That There Is High Risk