After obtaining an understanding of the internal control struture and assessing

Question

After obtaining an understanding of the internal control struture and assessing control risk of an entity, an auditor decided NOT to perform tests of controls. The auditor most likely decided that

a. the available evidential matter obtained through tests of controls would NOT support an increased level of control risk

b. a reduction in the assessed level of control risk is justified for certain financial statement assertions

c. it would be inefficient to perform test of controls that would result in a reduction in substantive tests

d. the assesed level of inherent risk exceeded the asessed level of control

Explanation / Answer

b. a reduction in the assessed level of control risk is justified for certain financial statement assertions

because the auditor believes that additional evidence to support a further reduction in control risk was not cost-beneficial to obtain.

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