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When the auditors assess control risk too high they will:
| Perform more substantive testing than is necessary. | ||||||||||||||
| Perform less substantive testing than is necessary. | ||||||||||||||
| Perform more control testing than is necessary. | ||||||||||||||
| Perform less control testing than is necessary.
When using variable mean-per-unit estimation sampling the auditor would probably require a smaller sample if the:
|
Expert Answer
Option 1 is correct, that is perform more substantive testing than necessary
As the Control risk is too high, so, the financial statements are carefully analysed and audited than normal because as there is in apppropriate controls in the enterprise, it increases the risk of financila misappropriation, frauds and mistakes, so there is need for more substantive testing.
2) Option 1 is correct, Population decreases
As misstatement estimation is based on multiplying the items in the population, hence if there is any decrease in the population, then there will be corresponding decrease in the estimation items,hence option 1 is correct.
