Diane Smith, CPA, performed tests of controls and substantive tests of transactions for sales for the month of March in an audit of the financial statements for the year ended December 31, 2011 Based on the excellent results of both the tests of controls and the substantive tests of transactions, s...

Generally successful tests of controls and substantive t ...

Diane Smith, CPA, performed tests of controls and substantive tests of transactions for sales for the month

Question:

Diane Smith, CPA, performed tests of controls and substantive tests of transactions for sales for the month of March in an audit of the for the year ended December 31, 2011. Based on the excellent results of both the tests of controls and the substantive tests of transactions, she decided to significantly reduce her substantive tests of details of balances at year-end. Evaluate this decision.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...