CAF-8 · Chapter 5 · Question 8 of 10
If an auditor evaluates the client's internal controls and finds them to be highly effective and properly implemented, what impact does this have on the audit strategy?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) The auditor will adopt a systems-based approach and perform a reduced level of substantive testing.
Explanation
If control risk is assessed as low (because controls are strong), the auditor can rely on them, reducing the extent of detailed substantive testing required (systems-based approach).
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