Question

The audit strategy known as the predominantly “substantive approach”: O means the auditor will spend minimum effort testing the client's system of internal controls. O means the auditor will conduct some interim testing and minimal year-end account-balance testing. O is appropriate when internal controls are very strong. O requires the auditor to conduct extensive control testing.


Need help on these 2 questions, thank you.

Answer 1

1. Substantive approach requires the auditor to conduct extensive control testing

Substantive approach helps in the material misstatements in the financial statement by conducting extensive control testing.

2.Audit risk that the auditor can control is the detection risk

Detection risk can be minimized by performing substantive procedures by nature ,timing and extent of audit procedures. whereas Inherent risk , control risk and financial risk cannot be in the control of auditor whereas  Detection risk is the risk of auditor failure to detect the material misstatement during the course of audit