Question

After considering the client's internal control the auditors have concluded that it is well designed and is functioning as anticipated.

Under these circumstances the auditors would most likely:A. Cease to perform further substantive procedures.B. Reduce substantive procedures in areas where the internal control was found to be effective.C. Increase the extent of anticipated analytical procedures.D. Perform all tests of controls to the extent outlined in the preplanned audit program.

Answer 1

B. Reduce substantive procedures in areas where the internal control was found to be effective.

Step-by-step explanation:

The entire quality of accounting is based on the internal controls design and implementing the internal controls.

If it is assessed that the internal controls are effective and that the company is even implementing it properly and thus, are applied properly, provides certain assurance towards the accounting practice.

As here the auditor has assessed that the internal controls are effectively implemented the evaluation of such areas while auditing will not involve substantive procedures in that area.

This is a positive effect of such internal controls.