Problem:
Diane Smith (ACA), carried out tests of controls and substantive tests of transactions for sales for month of March 2011 in audit of the financial statements for the year ended December 31, 2011. Based upon the excellent results of both the tests of controls and substantive tests of transactions, she decided to extensively diminish her substantive tests of details of balances at year-end.
Required:
Assess and discuss her decision to significantly diminish the substantive tests of details of balances at year-end.