When an audit assess control risk below the maximum level the auditor is required?
When an auditor assesses control risk below the maximum level?30. Assessing control risk at below the maximum level involves: Identifying specific internal control structure policies and procedures relevant to specific assertions that are likely to prevent or detect ma- terial misstatements in those assertions.
What happens when audit risk is low?If control risk is high, then the audit team team would conclude that controls are not operating effectively and they will not rely the company's internal controls. If control risk is low, then the audit team would conclude that controls are operating effectively.
When control risk is assessed as high the auditor needs to?When control risk is high, the auditor is concerned that a material misstatement may not be prevented, or that if a material misstatement exists in the organization's financial statements that it will not be detected, and therefore corrected by management.
Why may an auditor assess control risk at the maximum level for one or more assertions embodied in an account balance?Alternatively, the auditor may assess control risk at the maximum level because he or she believes controls are unlikely to pertain to an assertion or are unlikely to be effective, or because evaluating the effectiveness of controls would be inefficient.
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