Upon consideration of a client's system of internal control, when an auditor identifies areas with weaknesses, ________.
A)reduced substantive testing in this area will be appropriate to reach the desired level of assurance
B)increased substantive testing in this area will be appropriate to reach the desired level of assurance
C)the auditor should document the weaknesses and refer to them during next year's audit
D)the auditor should disclaim an opinion on those areas

Question

Quizplus · Accepted Answer

When an auditor identifies weaknesses in a client's system of internal control, they should increase substantive testing in those areas to reach the desired level of assurance. This is because weaknesses in internal control increase the risk of misstatement in the financial statements, and therefore require more testing to ensure accuracy. Option A is incorrect as reducing substantive testing would not provide sufficient evidence to support the opinion. Option C may be appropriate for documentation purposes, but it does not address the need for increased testing. Option D is incorrect as the auditor should attempt to provide an opinion on the financial statements to the best of their ability, even if there are weaknesses in internal control.

Upon Consideration of a Client's System of Internal Control, When