9

Which of the following responses by the auditor would be MOST likely when control risk for a client has been assessed to be high? Select one: O Increase reliance on tests of controls and reduce reliance on substantive testing of transactions and account balances. Refuse to continue with the remainder of the audit due to the high risk of fraud. Assume the client's management is dishonest and immediately report them to ASIC. O Do little or no tests of controls and increase reliance on substantive testing of transactions and account balances. During the audit of Bunnings Warehouse the auditor found a misstatement that equated to 13% of the base amount of Profit before Tax. According to the guidelines on assessing materiality of an error, this amount would be deemed to be: Select one: O more substantive testing will need to be completed to determine whether material. o not material. O a matter of professional judgement whether it is considered material. o material