The level of substantive procedures will be limited when:
A) the inherent and control risk assessment is low.
B) there are no controls tested or relied upon.
C) the inherent and control risk assessment is high.
D) the client requests the auditor to perform limited procedures.

Question

Quizplus · Accepted Answer

When the inherent and control risk assessment is low, it indicates that there is a lower risk of material misstatement in the financial statements. Therefore, the level of substantive procedures can be reduced. However, this does not mean that substantive procedures should be eliminated altogether. The auditor would still need to perform some level of substantive procedures to provide reasonable assurance that the financial statements are free from material misstatement.

The Level of Substantive Procedures Will Be Limited When