In Figure, explain the difference among C3, C2, and C1. Explain the circumstances under which it will be a good decision to obtain audit assurance from substantive tests at point C1. Do the same for points C2 and C3.
FIGURE Audit Assurance from Substantive Tests and Tests of Controls at
Different Levels of Internal ControlEffectiveness

Acceptable assurance Audit assurance cfrom control risk assessment and tests of controls Audit assurance from substantive tests No assurance INTERNAL CONTROL EFFECTIVENESS Weak control Strong control C, No reliance on controls. C2 Some reliance on controls C, Maximum reliance on controls.