In terms of an audit, define substantive strategy and reliance strategy. Include in your definition how the different strategies relate to internal control. Which strategy would best relate to a lower control risk?
What will be an ideal response?
A substantive strategy means that the auditor has decided not to rely on the entity's controls to reduce audit risk, but rather to reduce audit risk solely by obtaining sufficient evidence from substantive procedures including substantive tests of details and substantive analytical procedures. The reliance strategy requires a more detailed understanding of internal control than the substantive strategy does because the auditor intends to rely on the controls. Further, tests of controls are necessary to implement the reliance strategy.
A reliance strategy relates with lower control risk as the auditor would be able to rely more heavily on the controls if the control risk is lower.
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