Auditors have two strategies to choose from, the lower-assessed control risk strategy and the predominantly substantive strategy. Which of the following statements about the two audit strategies is incorrect? A. If the client’s internal controls appear to be effective, the auditor must use the lower assessed control risk strategy. B. When internal controls are effective in preventing errors in the financial statement, auditors can use the lower-assessed control risk strategy. C. Auditors can always choose to use the predominantly substantive strategy regardless of the control risk assessment. D. When internal controls are not effective in preventing errors in the financial statement, auditors need to use the predominantly substantive strategy. E. Compared to the predominantly substantive strategy, the lower-assessed control risk strategy is more cost-efficient.
Auditors have two strategies to choose from, the lower-assessed control risk strategy and the predominantly substantive strategy. Which of the following statements about the two audit strategies is incorrect?
| A. |
If the client’s internal controls appear to be effective, the auditor must use the lower assessed control risk strategy. |
|
| B. |
When internal controls are effective in preventing errors in the financial statement, auditors can use the lower-assessed control risk strategy. |
|
| C. |
Auditors can always choose to use the predominantly substantive strategy regardless of the control risk assessment. |
|
| D. |
When internal controls are not effective in preventing errors in the financial statement, auditors need to use the predominantly substantive strategy. |
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| E. |
Compared to the predominantly substantive strategy, the lower-assessed control risk strategy is more cost-efficient. |
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