Tests of controls results ultimately determine the amount of substantive audit procedures to be performed.

Question

Quizplus · Accepted Answer

Tests of controls are performed to determine the effectiveness of internal controls over financial reporting. The results of these tests help the auditor determine the extent of substantive audit procedures that need to be performed. If controls are found to be effective, the reliance on substantive procedures can be reduced, and vice versa. Therefore, tests of controls results ultimately determine the amount of substantive audit procedures to be performed.

Tests of Controls Results Ultimately Determine the Amount of Substantive