Final answer:
Auditors must assess control risk at the maximum level if they do not perform tests of controls for certain assertions, influencing the subsequent substantive procedures in the audit. This does not necessarily mean a substandard audit, nor does it directly lead to a qualified opinion.
Step-by-step explanation:
The question relates to the audit procedures and the implications when auditors do not perform tests of controls for certain assertions. If auditors decide not to test the operating effectiveness of controls for certain assertions, they are not necessarily performing a substandard audit. However, one consequence of foregoing these tests is that they must then assess control risk at the maximum level for those assertions. This is because they do not have sufficient audit evidence to support a lower assessment of control risk. Accordingly, assessing control risk at the maximum level would affect the nature, timing, and extent of substantive procedures they need to perform to obtain sufficient appropriate audit evidence to respond to the assessed risks of material misstatement.
It's important to note that not performing tests of controls does not automatically mean the auditors must issue a qualified opinion, nor does it alleviate their responsibility to communicate significant deficiencies in internal control that they become aware of during the audit to management and the board of directors, as long as those deficiencies are related to the financial statement audit.