If inherent risk is assessed as low, control risk is assessed as low and analytical procedures risk is very low, the acceptable levels of test of details risk would be:
A) Maximum
B) High
C) Moderate
D) Low
E) So low that substantive tests of details may not be necessary.

Question

Quizplus · Accepted Answer

When inherent risk, control risk, and analytical procedures risk are all assessed as low, the acceptable level of test of details risk is also very low. This means that the auditor has a high level of confidence in the internal controls and the analytical procedures performed, reducing the need for extensive substantive tests of details.

If Inherent Risk Is Assessed as Low, Control Risk Is