5 Questions
Which of the following is NOT a reason for assessing control risk as high?
The auditor should always assess control risk as high
What should the auditor do to address risks during the audit?
Emphasize the need to maintain professional skepticism
When should the auditor communicate material weaknesses in the internal control system to management?
As soon as practicable and at an appropriate level of responsibility
What should the auditor do if control risk is assessed as high?
Obtain more audit evidence from performance of substantive procedures
Which of the following is NOT a reason for assessing control risk as high?
The auditor should always assess control risk as high
Study Notes
Assessing Control Risk
- Assessing control risk as high is not due to the existence of an internal audit function.
Addressing Risks during Audit
- To address risks during the audit, the auditor should identify and assess the risks of material misstatement, whether due to error or fraud.
Communicating Material Weaknesses
- The auditor should communicate material weaknesses in the internal control system to management on a timely basis.
Control Risk Assessed as High
- If control risk is assessed as high, the auditor should perform more detailed substantive procedures to gather sufficient evidence.
This quiz tests your knowledge on substantive test procedures and control risk assessment. Learn about the importance of designing and performing substantive procedures for various material classes of transactions, account balances, and disclosures. Understand how the level of control risk affects the amount of audit evidence needed.
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