Which factor influences the extent of substantive procedures during an audit?

The overall risks of material misstatement directly influence the extent of substantive procedures during an audit. Substantive procedures are designed to detect material misstatements in the financial statements, and their extent is determined by the auditor's assessment of risks. When the auditor identifies a higher risk of material misstatement—whether due to inherent risks in certain transactions, complex accounting practices, or other factors—there is a corresponding need for more extensive substantive testing.

For instance, if an entity operates in a highly regulated industry or has complex transactions that are harder to verify, auditors will increase their substantive procedures to obtain sufficient appropriate audit evidence. This helps ensure that all significant risks are addressed and that the financial statements fairly present the financial position of the entity. Thus, the recognition of these risks is pivotal in determining how thorough the audit procedures will be.

Other factors, such as the efficiency of the audit team, deadlines for reporting audits, and the quality of client management, may impact operational aspects of the audit process but do not fundamentally alter the requirement for substantive procedures based on risk assessment. Hence, while those aspects can affect how the audit is conducted, the primary driver of substantive testing is the identified risk of material misstatement itself.