An auditor may decide not to test controls related to certain assertions because the auditor believes:

Question

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Choice "B" is correct. An auditor may decide to assess control risk at the maximum level for certain assertions because the auditor believes evaluating the effectiveness of controls is inefficient (i.e., it would be more efficient to test the assertions substantively). Choice "A" is incorrect. Whether there is sufficient appropriate evidence to support the assertions relates to the auditability of the financial statements, whereas the decision whether or not to test controls relates to the audit strategy to be used (i.e., the balance between tests of controls and substantive testing). Choice "C" is incorrect. The auditor will need to test controls if more emphasis on tests of controls than substantive tests is warranted. Choice "D" is incorrect. The auditor will generally consider the relationship of assertions to specific account balances whether or not tests of controls are performed.

An Auditor May Decide Not to Test Controls Related to Certain