Tests of Controls Are Conducted When

question 79

Multiple Choice

Tests of controls are conducted when:

• A) control risk may be higher than the initial assessment.
• B) the auditor determines that substantive testing is not effective.
• C) controls are expected to be operating effectively.
• D) controls are not operating as effectively as initially assessed.

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Definitions:

Market Share

The portion of a market controlled by a particular company or product.

Profitability

A measure of the efficiency of a company in generating profits from its revenue.

Unit Costs

Unit costs refer to the cost incurred by a company to produce, store, and sell one unit of a particular product or service.