Can control reliance reduce substantive sample sizes?

Question

Accepted Answer

Yes. When the auditor obtains sufficient appropriate evidence that relevant controls operated effectively, the planned substantive response may be reduced or made more targeted. The precise effect on sample sizes depends on the assessed risk, the degree of reliance, the procedure and the firm's methodology.

Control reliance is not a shortcut. The audit team first needs strong process understanding, relevant controls, evidence of design and implementation, and appropriate operating-effectiveness testing. If that work is weak, reducing substantive testing simply creates a gap in audit evidence.

The commercial opportunity is that better technology can reduce the cost of building this foundation. If process documentation, control identification and testing preparation are largely manual, reliance may appear uneconomic on smaller or mid-market engagements. If AI removes much of that legwork, a controls-based approach can become practical across a wider part of the portfolio.

Any numeric reduction should be modelled against the firm's own methodology and engagement profile.

Platformed reduces the manual work involved in process understanding, control assessment and testing preparation, making a controls-based approach more practical where reliance is appropriate. The auditor applies the firm's methodology and determines any effect on substantive work or sample sizes.