The chapter emphasizes that when the auditor determines that controls are not working, the auditor needs to anticipate
(a) What kind of misstatements could occur in the financial statements,
(b) How those misstatements might occur, and
(c) How the auditor should change the substantive testing of the affected account balance(s) to determine if a misstatement did occur. Assume that the authorization process for ordering goods was found to contain a material weakness. Use the framework above to identify the kind of misstatements that could occur, how they might occur, and how the auditor would adjust substantive audit procedures.