If the risk of material misstatement is high, should I perform more or less substantive testing?
If the risk of material misstatement is high, that means that inherent risk is high and that control risk is also high. When that is the case, in order to reduce overall audit risk, more effective substantive testing procedures should be performed.
To perform more effective substantive procedures, the audit team should consider what type of test would provide the highest level of assurance (e.g. confirmations over detailed testing).
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